Slide 1: Record Results in 2015, Strategic Targets Raised
RECORD RESULTS IN 2015 STRATEGIC TARGETS RAISED SIKA MEDIA AND INVESTOR PRESENTATION, FEBRUARY 26, 2016
Slide 2: Table of Contents
TABLE OF CONTENTS 1. STRATEGY UPDATE Dr. Paul Hälg, Chairman of the Board 2. HIGHLIGHTS, STRATEGY Jan Jenisch, CEO 3. RESULTS 2015 Adrian Widmer, CFO 4. STRATEGY IMPLEMENTATION IN AFRICA Paul Schuler, Regional Manager EMEA 5. STRATEGY IMPLEMENTATION IN USA Christoph Ganz, Regional Manager NA 6. OUTL
Slide 3: 1. Strategy Review and Raised Targets
1. STRATEGY REVIEW AND RAISED TARGETS DR. PAUL HÄLG, CHAIRMAN OF THE BOARD
Slide 4: Strategy 2018 – Achievements Since 2012
STRATEGY 2018 – ACHIEVEMENTS SINCE 2012 A PROVEN TRACK RECORD OF DELIVERY PILLARS OF THE GROWTH MODEL ACHIEVEMENTS • Successful Target Market concept MARKET PENETRATION • Megatrends driving growth • 297 new patents filed INNOVATION • 20 Global Technology Centers • 30 new plants opened EMERGING M
Slide 5: Strategy 2018 Review and Raised Targets
STRATEGY 2018 STRATEGY REVIEW AND RAISED TARGETS Since the targets for Strategy 2018 have been reached ahead of schedule, with three full business years to go, the Board of Directors decided to raise them in January 2016, as a result of the strategy review carried out in 2015. Bottom-up review of
Slide 6: Previous Targets vs New and Raised Targets
STRATEGY 2018 STRATEGY REVIEW AND RAISED TARGETS PREVIOUS TARGETS NEW AND RAISED TARGETS FROM JANUARY 2016 6-8% growth per year 6-8% growth per year 42-45% of sales in 6-8 new plants per year emerging markets 100 national subsidiaries by 2018 >10% operating profit 12-14% operating profit per year >6
Slide 7: Strong Opposition to Hostile Takeover Attempt
ENSURING THE SIKA SUCCESS STORY CONTINUES STRONG OPPOSITION TO HOSTILE TAKEOVER ATTEMPT Strong performance underscores the necessity of safeguarding Sika’s successful business model in the interest of all stakeholders Public shareholders, Board of Directors, Group Management, 160 Senior Managers
Slide 8: 2. Highlights and Strategy Execution 2015
2. HIGHLIGHTS AND STRATEGY EXECUTION 2015 JAN JENISCH, CEO
Slide 9: Highlights 2015
HIGHLIGHTS 2015 1. Continued growth +6.2% sales growth in local currencies to CHF 5,489.2 million +2.3% employees to 17,281 2. Key investments 3 new national subsidiaries 9 new factories 5 acquisitions 3. Record results CHF 673.3 million EBIT (+6.3%) CHF 465.1 million net profit (+5.4%
Slide 10: Key Figures – Record Results
KEY FIGURES RECORD RESULTS In million CHF 2014 2015 Δ% Net sales 5,571.3 5,489.2 - 1.5% Gross results as % of net sales 53.0 54.1 EBITDA 798.3 837.3 + 4.9% EBIT 633.2 673.3 + 6.3% Net profit 441.2 465.1 + 5.4% Operating free cash flow 417.5 451.5 + 8.1% ROCE in % 23.3 24.3 10
Slide 11: 6.2% Sales Growth for 2015
6.2% SALES GROWTH FOR 2015 SALES GROWTH IN ALL REGIONS +8.4% + 5.6% + 2.1% 839 North America + 9.5% 1,017 2,600 Asia/Pacific EMEA 600 Latin America 2014 2015 (in CHF mn, Growth of 7.9% in Emerging Markets Growth in LC) 11
Slide 12: Accelerated Build-up of Emerging Markets
ACCELERATED BUILD-UP OF EMERGING MARKETS INVESTMENTS 2015 Opening of Sika plants: 2nd plant in United Arab Emirates (Dubai, March 2015) 1st plant on Reunion Island (March 2015) 1st plant in Sri Lanka (Ekala, March 2015) 1st plant in Paraguay (Asunción, May 2015) 4th plant in Russia (Volgog
Slide 13: Build-up of Supply Chain in Growth Markets
BUILD-UP OF SUPPLY CHAIN IN GROWTH MARKETS INVESTMENTS 2015 Opening of 17th North American plant in Philadelphia – December 2015 13
Slide 14: New National Subsidiaries in 2015
CONTINUING HIGH OPERATING SPEED NEW NATIONAL SUBSIDIARIES IN 2015 New subsidiaries: Myanmar (March 2015) Tanzania (September 2015) Ethiopia (September 2015) Sika Myanmar Sika Myanmar production facilities 14
Slide 15: Acquisitions in 2015
CONTINUING HIGH OPERATING SPEED ACQUISITIONS IN 2015 Company Country Target Market Duro-Moza Mozambique Refurbishment BMI USA Refurbishment, Flooring Axson Technologies Global Industry CTA Australia Refurbishment Addiment Italia Europe Concrete Axson Technologies BMI Duro-Moza 15
Slide 16: Mortar Is Sika's Fastest Growing Technology
MORTAR IS SIKA’S FASTEST GROWING TECHNOLOGY CORE ELEMENT OF STRATEGY 2018 12.9% sales growth in 2015 Generates more than 20% of sales in construction segment 85 production plants across the globe 22 new plants opened since 2012 9 out of 17 acquired companies since 2012 Generates high, ab
Slide 17: Innovation in Mortars
INNOVATION IN MORTARS TWO IN ONE TILE ADHESIVE SikaCeram® -500 APPLICATION TIMES SLASHED FROM NINE Ceralastic FLEXIBLE, ONE-COMPONENT, DAYS TO TWO DUE TO FIBER-REINFORCED MORTAR ONE SINGLE APPLICATION WATERPROOFING AND ADHESIVE SYSTEM TWO IN ONE PRODUCT 30% SAVINGS IN APPLICATION COSTS AND 45% LESS
Slide 18: Innovation in Waterproofing
INNOVATION IN WATERPROOFING TACKLING CHALLENGING PROJECTS SikaProof® A FIRST TIME THE USED IN THE CREATION OF PRODUCT HAS BEEN THE STUNNING RABAT USED IN GRAND THEATRE IN NORTH AFRICA MOROCCO PARTS OF THE BUILDING’S FOUNDATION ARE PERMANENTLY BELOW WATER PLACING EXTREMELY HIGH REQUIREMENTS ON THE WA
Slide 19: Innovation in Flooring
INNOVATION IN FLOORING SETTING NEW BENCHMARKS WITH HIGH-PERFORMANCE MOLECULES SIKA HAS DEVELOPED NEW AMINE TECHNOLOGY PROTECTED BY OVER 20 PATENTS THE NEW TECHNOLOGY COMBATS THE DRAWBACKS PRESENTED BY TRADITIONAL EPOXY RESIN FLOORING SYSTEMS ADVANTAGES: • VOC-FREE • LOW-ODOR • CURES RAPIDLY EVEN IN
Slide 20: Five-Year Overview – Net Sales and EBIT
FIVE-YEAR OVERVIEW - NET SALES AND EBIT CONTINUATION OF PROFITABLE GROWTH STRATEGY 20
Slide 21: 3. Results 2015
3. RESULTS 2015 ADRIAN WIDMER, CFO
Slide 22: Financial Highlights 2015
FINANCIAL HIGHLIGHTS 2015 Strong sales and volume growth of 6.2% (-1.5% in CHF) in spite of weaknesses in main markets, all regions contributed Over proportional EBIT growth, reaching 12.3% of net sales, +CHF 40 million in absolute terms in spite of adverse FX environment Lower interest expens
Slide 23: Revenues 2015
REVENUES 2015 6.2% GROWTH IN LOCAL CURRENCIES In million CHF 2014 2015 Δ % Net sales 5,571.3 5,489.2 - 82.1 - 1.5 Organic growth + 225.5 + 4.0 Acquisition effect + 119.8 + 2.2 Currency effect - 427.4 - 7.7 23
Slide 24: Sales Growth by Quarter
SALES GROWTH BY QUARTER DYNAMIC GROWTH MOMENTUM 28% Growth rates in local currencies 23.3% Acquisition 23% Organic 18% 9.2% 14.0% 13% 11.7% 7.4% 8.3% 5.4% 5.3% 5.1% 6.0% 5.3% 14.1% 2.5% 8% 1.4% 1.1% 2.6% 2.2% 6.6% 6.3% 5.8% 3.9% 4.0% 3% 3.4% 3.1% -2% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 N
Slide 25: Profit & Loss
PROFIT & LOSS STRONG IMPROVEMENT IN KEY FINANCIALS In million CHF 2014 NS 2015 NS Growth Net sales 5,571.3 100% 5,489.2 100% - 1.5% Gross results 2,951.3 53.0% 2,970.8 54.1% + 0.7% Personnel costs -1,093.7 -19.7% -1,106.5 -20.1% + 1.2% Other OPEX -1,059.3 -19.0% -1,027.0 - 18.7% - 3.0% Depreciation
Slide 26: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET DEBT-FREE BALANCE SHEET – OVER 1 BILLION IN CASH In million CHF 31.12.2014 31.12.2015 Δ% Cash and cash equivalents 898.8 1,074.4 + 19.5 Other current assets 1,697.3 1,703.7 + 3.8 Current assets 2,596.1 2,778.1 + 7.0 Non-current assets 2,221.8 2,145.7 - 3.4 Total assets 4,8
Slide 27: Cash Flow Statement
CASH FLOW STATEMENT RECORD OPERATING FREE CASH FLOW In million CHF 2014 2015 Cash flow from operating activities 554.4 585.8 CapEx/sale of assets/acquisitions -204.6 -206.3 Free cash flow 349.8 379.5 Acquisitions/financial assets 67.7 72.0 Operating free cash flow 417.5 451.5 Free cash flow 349.8 37
Slide 28: Dividend Proposal
DIVIDEND PROPOSAL BOARD PROPOSES 8.3% DIVIDEND INCREASE Dividend payment CHF 78.00 per bearer share CHF 13.00 per registered share In million CHF 2014 2015 Group profit (after minorities) 439.0 460.3 Dividend out of retained earnings 182.8 198.1 Total payout ratio 41.6 % 43.0 % 28
Slide 29: 4. Successful Execution of Africa Strategy
4. SUCCESSFUL EXECUTION OF AFRICA STRATEGY PAUL SCHULER, REGIONAL MANAGER EMEA
Slide 30: Africa's High Potential
AFRICA’S HIGH POTENTIAL THE WORLD'S SECOND-LARGEST CONTINENT World’s fastest growing continent, 54 countries Resources and raw material driving economic growth 15% of the global population Strong population growth exceeding Asia: 1.1 billion inhabitants, figure expected to double by 2050
Slide 31: Successful Implementation of Sika's Africa Strategy
SUCCESSFUL IMPLEMENTATION OF SIKA’S AFRICA STRATEGY ACCELERATED EXPANSION IN AFRICA Strategy developed in 2013 Macroeconomic aspects: GDP, political stability, demographic trends, infrastructure spend Microeconomic criteria: annual cement consumption and market potential for concrete, mortars,
Slide 32: Sika's Track Record in Africa
SIKA’S TRACK RECORD IN AFRICA STRONG EXECUTION +22% 9 Sales growth in 2015 New plants since 2012 16 subsidiaries 688 8 added since 2012 employees 32
Slide 33: Major Construction Projects with Sika Products
MAJOR CONSTRUCTION PROJECTS WITH SIKA PRODUCTS Bridge over Maputo Bay, Mozambique Dangote fertilizer plant Lagos, Nigeria 33
Slide 34: Major Construction Projects with Sika Products
MAJOR CONSTRUCTION PROJECTS WITH SIKA PRODUCTS Luanda International Airport, Angola Mall of Egypt, Cairo, Egypt 34
Slide 35: 5. Successful Build-up of the US Market
5. SUCCESSFUL BUILD-UP OF THE US MARKET CHRISTOPH GANZ, REGIONAL MANAGER NORTH AMERICA
Slide 36: Focus on Fastest Developing Metro Areas
FOCUS ON FASTEST DEVELOPING METRO AREAS INVESTMENTS INTO SUPPLY CHAIN AND SALES FORCE Forbes list of the 20 fastest growing metro areas in the USA 1. Austin, TX 11. Seattle, WA 2. Raleigh, NC 12. Atlanta, GA No. 1 – Austin, Texas 3. Phoenix, AZ 13. Provo, UT 4. Dallas, TX 14. Cape Coral, FL 5. Salt
Slide 37: North American Supply Chain Strategy 2018
NORTH AMERICAN SUPPLY CHAIN STRATEGY 2018 SUCCESSFUL NEW PLANT OPENINGS IN 2014/2015 Denver, Colorado One of the fastest growing metropolitan areas New admixture plant Sales up by 25% Atlanta, Georgia One of the fastest growing metropolitan areas New mortar plant next to admixture plant
Slide 38: Accelerated Build Up of Presence in USA
ACCELERATED BUILD UP OF PRESENCE IN USA 17 plants in USA and Canada 7 new plants opened between 2013-2016 Presence in residential Investment focus 10% market through Home Depot on fast growing sales growth (2000 stores) and metro areas in 2015 Lowes (1800 stores) 38
Slide 39: Selected Key Projects 2014/2015 in the USA
FOCUS ON KEY ECONOMIC AREAS SELECTED KEY PROJECTS 2014/2015 IN THE USA Apple headquarter, California Tesla GigaFactory, Nevada East Side Access, New York State Farm Arena, Illinois Barclay’s center Brooklyn, New York All Aboard Shopping Center, Miami 39 |
Slide 40: Hudson Yards Project
HUDSON YARDS PROJECT SIKA HELPS A NEW DISTRICT ARISE 40
Slide 41: 6. Outlook
6. OUTLOOK JAN JENISCH, CEO ® BUILDING TRUST Bs
Slide 42: Sika's Growth Model with New and Raised Targets
STRATEGY 2018 SIKA’S GROWTH MODEL WITH NEW AND RAISED TARGETS MARKET PENETRATION 6 - 8% GROWTH PER YEAR 6 - 8 NEW PLANTS PER INNOVATION YEAR 100 NATIONAL SUBSIDIARIES BY 2018 EMERGING MARKETS 12 - 14% OPERATING PROFIT PER YEAR ACQUISITIONS > 8% OPERATING FREE CASH FLOW PER YEAR 25% RETURN ON CAPITAL
Slide 43: Outlook for 2016
OUTLOOK FOR 2016 2016 is expected to be a year with challenging market conditions and volatile currency developments. However, our growth model has proven to be robust in difficult times and we expect to remain on target with our Strategy 2018. Sales growth expectations of 6-8% in local currencies
Slide 44: 7. Questions and Answers
7. QUESTIONS AND ANSWERS ® BUILDING TRUST Bs
Slide 45: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS 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
Slide 46: Thank You for Your Attention
THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST Bs