Slide 1: Our First Nine Months 2023
OUR FIRST NINE MONTHS 2023 SALES RISE BY 12.4% THANKS TO MBCC ACQUISITION – SIGNIFICANT PROFITABILITY INCREASE IN Q3 SIKA INVESTOR PRESENTATION OCTOBER 2023
Slide 2: Agenda
1. OUR FIRST NINE MONTHS 2023 2. OUR NEW STRATEGY 2028 – BEYOND THE EXPECTED 3. OUTLOOK
Slide 3: 1. Our First Nine Months 2023
1. OUR FIRST NINE MONTHS 2023 SALES RISE BY 12.4% THANKS TO MBCC ACQUISITION – SIGNIFICANT PROFITABILITY INCREASE IN Q3
Slide 4: Results in the First 9 Months of 2023
RESULTS IN THE FIRST 9 MONTHS OF 2023 GROWTH IN LOCAL CURRENCIES OF 12.4% 1. Sales and profit ▪ Sales growth of 12.4% in local currencies. Record sales of CHF 8,449.2 million (+5.6% in CHF) ▪ Expansion of material margin to 53.1% (first 9 months of 2022: 49.3%) ▪ Increase in EBIT margin adjusted for
Slide 5: Highlights Year to Date: Completion of MBCC Acquisition
HIGHLIGHTS YEAR TO DATE COMPLETION OF MBCC ACQUISITION Opening of a new mortar and admixture plant in Eastern India (June 2023) Acquisition of Thiessen Team USA (July 2023) Closing of the acquisition of MBCC Group (May 2023) New product line for macro fibers in Chattanooga, Tennessee (July 2023) Acq
Slide 6: Increased MBCC Synergy Potential
INCREASED MBCC SYNERGY POTENTIAL UPDATED TO CHF 180 – 200 MILLION P.A. BY 2026 200 180 180 160 Initial guidance Updated guidance in CHF mn 6
Slide 7: 2023 Sales Growth Lifted by Acquisitions
2023 SALES GROWTH LIFTED BY ACQUISITIONS 12.4% SALES GROWTH (5.6% IN CHF) 9M 2022 9M 2023 + 10.6% + 12.4% in CHF billion, growth in LC + 14.0% + 13.5% + 13.3% 2.62 3.38 1.81 0.64 8.45 Americas EMEA Asia/Pacific Global Business Group 7
Slide 8: Sales Growth First Nine Months 2023
SALES GROWTH FIRST NINE MONTHS 2023 MBCC AS SIGNIFICANT CONTRIBUTOR – HIGH FX IMPACT in CHF mn -547 +878 +107 +14 8,449.2 7,998.5 Net sales Organic Bolt-on MBCC FX Net sales HY 22 Nine acquisitions HY 23 Nine Months 22 (net) Months 23 8
Slide 9: Sales Growth Nine Months: Growth Lifted by MBCC Acquisition
SALES GROWTH NINE MONTHS GROWTH LIFTED BY MBCC ACQUISITION 18.1% 18.5% 1.3% 3.4% 12.4% in LC acquisition 16.8% 15.1% 11.1% organic 1.3% in CHF mn 9M 2021 9M 2022 9M 2023 Sales 6’862.7 7’998.5 8’449.2 9
Slide 10: Sales Growth First Nine Months 2023 by Region
SALES GROWTH FIRST NINE MONTHS 2023 LOCAL CURRENCY GROWTH IN ALL REGIONS – HIGH FX IMPACT +4.8% +7.8% +3.3% +8.2% Growth in CHF +10.6% +14.0% +13.5% +13.3% Growth in LC -5.8% -6.2% -10.2% -5.1% FX impact +12.8% +13.9% +8.1% +0.0% Acquisition 16% 84% Construction Industry EMEA Americas Asia/Pacific G
Slide 11: Results in the Nine Months of 2023
RESULTS IN THE NINE MONTS OF 2023 IMPROVED GROSS RESULT AND OPERATING FREE CASH FLOW in CHF mn 2022 NS 2023 NS Growth Net sales 7,998.5 100% 8,449.2 100% 5.6% Gross result 3,941.8 49.3% 4,487.9 53.1% 13.9% Personnel expenses -1,309.1 -16.4% -1,477.3 -17.5% Other OPEX -1,111.3 -13.9% -1,507.9 -17.8%
Slide 12: Sika's Growth Model Delivers
SIKA’S GROWTH MODEL DELIVERS IMPROVED EBIT MARGIN ADJUSTED FOR ACQUISITION-RELATED COST in CHF mn, growth in LC in CHF mn Net sales (9 months) EBIT Net (9 months) Profit NET SALES +12.4% NET SALES +18.1% +2.6% +14.1% +15.1% 8,449.2 1,144.8 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023
Slide 13: EBIT Bridge Nine Months 2023
EBIT BRIDGE NINE MONTHS 2023 IMPROVED EBIT MARGIN ADJUSTED FOR ACQUISITION-RELATED COST 5 months MBCC intangible amortization of CHF 42 mn (~CHF 100 mn annualized impact) 2.1% 3.8% -0.2% -0.5% -2.1% -0.3% 0.3% -1.2% 0.5% 1’231.5 15.5% 1’250.1 15.4% 1’102.5 14.8% 1’144.8 13.8% 13.5% EBIT Divestment g
Slide 14: Strong Topline Growth and Profit in the Last Years
STRONG TOPLINE GROWTH AND PROFIT IN THE LAST YEARS PERFORMANCE FROM 2019 TO 2023 in CHF mn, growth in LC 14
Slide 15: 2. Our New Strategy 2028 – Beyond the Expected
2. OUR NEW STRATEGY 2028 – BEYOND THE EXPECTED
Slide 16: Strategy 2028: What We Build Upon – What Will Change
STRATEGY 2028 WHAT WE BUILD UPON – WHAT WILL CHANGE What we build upon What will change/be reinforced ▪ People & Culture as strong backbone ▪ Build on 4 strong strategic pillars ▪ Decentralized market facing decisions, ▪ Balanced set of Financial & non-Financial targets agile organization ▪ Switch t
Slide 17: Sika Automotive & Industry Organization 2024
SIKA AUTOMOTIVE & INDUSTRY ORGANIZATION 2024 COMING TOGETHER Automotive Industry Automotive + Industry Automotive and Industry have been combined on a regional level to gain maximum momentum in a dynamic environment, increasingly driven by solutions for e-mobility and renewables. 17
Slide 18: Strategy 2028: Profitable Growth to Continue
STRATEGY 2028 – BEYOND THE EXPECTED PROFITABLE GROWTH TO CONTINUE 23.0% 20.0% EBITDA 18.7% EBITDA 16.4% 10.5 bn 7.1 bn 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 18 Note: Historical Sales represent actual CHF values, growth figures in LC
Slide 19: Megatrends Driving Sustainable Growth
MEGATRENDS DRIVING SUSTAINABLE GROWTH FURTHER ACCELERATION POPULATION GROWTH URBANIZATION DEMOGRAPHIC RESOURCE SCARCITY CHANGE CLIMATE CHANGE & INCREASING TECHNOLOGICAL DIGITALIZATION SUSTAINABILITY REGULATIONS PROGRESS 19
Slide 20: Construction Chemicals Outgrow Construction Market
CONSTRUCTION CHEMICALS OUTGROW CONSTRUCTION MARKET MEGATRENDS ACCELERATE DEMAND AND DRIVE PENETRATION Construction chemicals penetration (1991 = 100) 600 500 400 300 200 100 2x penetration 2.5 – 4.0x penetration increase increase 0 1990 2000 2010 2020 2030 2040 2050 Source: IHS, Freedonia | 1) penet
Slide 21: Market Share in Construction Chemicals and Industry
MARKET SHARE IN CONSTRUCTION CHEMICALS AND INDUSTRY TOTAL ADDRESSABLE MARKET 2023: CHF 110 BILLION 11% 45% Top 30 competitors Competitive landscape (incl. Sika) account remains very fragmented despite for 55% of market ongoing M&A activity share 21
Slide 22: Four Pillars of Growth Strategy 2028
FOUR PILLARS OF GROWTH STRATEGY 2028
Slide 23: Sika's Growth Strategy 2028: The Pillars of the Strategy
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 24: Strong Execution and Benefits of Megatrends
STRONG EXECUTION AND BENEFITS OF MEGATRENDS SIKA STRONGLY POSITIONED IN 2023 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 RESOU
Slide 25: Market Penetration and Its Levers
MARKET PENETRATION AND ITS LEVERS THE ART OF INCREASING MARKET SHARE Leveraging Cross- Multi-channel Go where Key High potential strong position selling approach the money is geographies markets 25
Slide 26: Market Penetration and Its Levers: Examples
MARKET PENETRATION AND ITS LEVERS EXAMPLES Leveraging strong position Cross-selling Fostering our worldclass brand and leveraging Getting more business out of every project our strong reputation with solution offering Samsung semiconductor project in Austin Texas, USA 26
Slide 27: Innovation & Sustainability
INNOVATION & SUSTAINABILITY
Slide 28: Innovation & Sustainability – Transforming Innovation and Effective Sustainability
INNOVATION & SUSTAINABILITY – TRANSFORMING INNOVATION AND EFFECTIVE SUSTAINABILITY PRESERVE NATURAL CLIMATE CHANGE INNOVATION RESOURCES MITIGATION Increase water and waste Reduction direct and All new product developments efficiency. indirect emissions. to be SPM validated. Reduce usage of hazardous
Slide 29: Innovation & Sustainability – Strategic Pillars 2028
INNOVATION & SUSTAINABILITY – STRATEGIC PILLARS 2028 SIKA’S NET ZERO PATHWAY – DRIVING THE TRANSFORMATION OUR KEY LEVERS Education and capacity building to improve material efficiency and circularity Accelerated use Continued focus of alternative on operational low carbon efficiencies supplies Partn
Slide 30: Enabling Sustainable Solutions: Sustainability Portfolio Management
INNOVATION & SUSTAINABILITY – ENABLING SUSTAINABLE SOLUTIONS SUSTAINABILITY PORTFOLIO MANAGEMENT (SPM) ▪ The SPM evaluates solutions based on All new product 12 sustainability and 6 performance developments to be categories. SPM validated with a ▪ SPM is used to classify, and market positive validat
Slide 31: GHG Emissions – Scope 1, 2, and 3
INNOVATION & SUSTAINABILITY GHG EMISSIONS - SCOPE 1, 2, AND 3 Scope 1 and 2 Scope 3 -20% in line with net zero pledge absolute emission reduction Reduction of use of fossil fuels in Optimizing formulations: production processes and Cement reduction, bio-based raw transportation materials, recycled r
Slide 32: Acquisitions
ACQUISITIONS ® BUILDING TRUST Bs
Slide 33: Acquisitions: Strategic Lever with Multiple Dimensions
ACQUISITIONS STRATEGIC LEVER WITH MULTIPLE DIMENSIONS Expansion Bolt-ons 33
Slide 34: Acquisitions from 2018 to 2022
ACQUISITIONS – FROM 2018 TO 2022 ADDITIONAL GROWTH PLATFORMS IN ALL TARGET MARKETS 2018 2019 2020 2021 2022 2023 in CHF mn 4 5 2 7 2 2 L L Concrete Waterproofing S&B Refurbishment Roofing Flooring Building Finishing Industry 34
Slide 35: People & Culture
PEOPLE & CULTURE ® BUILDING TRUST Bs
Slide 36: Investing in Our People & Culture Is Investing in Our Future Success
WE BUILD TRUST EVERYDAY INVESTING IN OUR PEOPLE OUR EMPLOYEES FEEL VALUED, EMPOWERED AND PROUD TO WORK FOR SIKA & CULTURE IS INVESTING SAFE ENGAGED INCLUSIVE IN OUR FUTURE SUCCESS. Be effective leaders that build a safe, attractive and inclusive LEADERS ARE IN CHARGE. environment where people feel i
Slide 37: Employee Engagement – Reconfirm Our High Score
PEOPLE & CULTURE EMPLOYEE ENGAGEMENT - RECONFIRM OUR HIGH SCORE ▪ Engagement as key performance metric to measure resilience and sustainability of an organization. Highly engaged employees drive performance and business success. ▪ Sika’s strong Corporate culture as most competitive advantage. EMPLOY
Slide 38: Community Engagement: Sika Day
PEOPLE & CULTURE – COMMUNITY ENGAGEMENT OUR EMPLOYEES AROUND THE WORLD AT SIKA DAY Sika Mexico Sika Germany Sika Mongolia 38
Slide 39: 3. Outlook 2023
3. OUTLOOK 2023 ® BUILDING TRUST By
Slide 40: Outlook 2023
OUTLOOK 2023 CONTINUATION OF SUCCESSFUL GROWTH STRATEGY ▪ For 2023 Sika expects a sales increase of above 15% in local currencies, Expected sales including the effect of the MBCC acquisition increase in LC ▪ Confirmation of anticipated over-proportional EBIT increase for the year, excluding the effe
Slide 41: Thank You for Your Attention
as THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST By
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