Sika Ag · SIX:SIKA

Sika — H1 2016 Earnings Presentation

32 slides from Sika's earnings presentation, September 2016

  1. Slide 1: Dynamic Growth and Record Margins in First Half of 2016

    DYNAMIC GROWTH AND RECORD MARGINS IN FIRST HALF OF 2016 SIKA INVESTOR PRESENTATION SEPTEMBER, 2016

  2. Slide 2: 1. Highlights and Results First Half-Year 2016

    1. HIGHLIGHTS AND RESULTS FIRST HALF-YEAR 2016

  3. Slide 3: Dynamic Growth and Record Margins in First Half of 2016

    DYNAMIC GROWTH AND RECORD MARGINS IN FIRST HALF OF 2016  Sales growth of 7.6% (6.9% in CHF) to CHF 2,806 million  Growth in all regions: Double-digit in the USA, Canada, Argentina, Chile, UK, Africa, Southeast Asia, the Pacific area, and Automotive  High growth in profitability: EBIT +22.6%, net

  4. Slide 4: Key Figures Half-Year 2016: Above-Average Increase in Profit

    KEY FIGURES HALF-YEAR 2016 ABOVE-AVERAGE INCREASE IN PROFIT in CHF mn 2015 2016 Δ% Net sales 2,625.2 2,806.2 6.9% Gross results as % of net sales 54.4 55.6 EBITDA 370.2 439.7 +18.8% EBIT 288.6 353.7 +22.6% Net profit 197.3 246.3 +24.8% Operating free cash flow 43.0 106.0 ROCE in % 22.8 25.5 4

  5. Slide 5: Sales Growth by Quarter: Strong Organic Growth with 6.5%

    SALES GROWTH BY QUARTER STRONG ORGANIC GROWTH WITH 6.5% 12% 10% 8.3% 8.3% 7.0% 8% 6.0% 2.5% 2.9% 0.5% 6% 5.1% 5.3% in LC 1.1% 2.6% acquisition 4% 2.2% organic 2% 4.0% 3.4% 3.1% 5.8% 5.4% 6.5% 0% Q1 PY Q2 PY Q3 PY Q4 PY Q1 CY Q2 CY in CHF mn Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Quarterly 1,195.3 1,429

  6. Slide 6: Sales Half-Year 2016: Growth in All Regions

    SALES HALF-YEAR 2016 GROWTH IN ALL REGIONS + 7.5 % +15.9 % - 9.8 % + 5.3 % Growth in CHF + 6.6 % +12.7 % + 5.9 % + 4.6 % Growth in LC + 0.9 % + 3.2 % - 15.7 % + 0.7 % FX impact + 2.4 % + 1.7 % + 0.0 % + 1.1 % Acquisition 22% 78% Construction Industry 1,335 441 274 510 in CHF mn EMEA North America La

  7. Slide 7: Growth Momentum Continues Half-Year 2016

    GROWTH MOMENTUM CONTINUES HALF-YEAR 2016 7.6% SALES GROWTH (6.9% IN CHF) + 12.7% + 6.6% + 4.6% 381 441 North America 484 510 + 5.9% Asia/Pacific 1,242 1,335 304 274 EMEA Latin America HY 1 / 2015 HY 1 / 2016 (in CHF million, growth in LC) 7

  8. Slide 8: Five-Year Overview – Half-Year Figures: Continuously Improving Margins

    FIVE-YEAR OVERVIEW – HALF-YEAR FIGURES CONTINUOUSLY IMPROVING MARGINS 275 9.0 % EBIT IN CHF 400 12.6% NET PROFIT IN CHF 8.8% +24.8% 12. 0% 375 11.0% +22.6% 250 8.0 % 7.5% 246 350 In % of sales 10.0% 354 In % of sales 225 10. 0% 325 9.2% 6.7% 7.0 % 8.6% 300 200 8.0 % 5.9% 275 289 197 6.0 % 5.4% 266 1

  9. Slide 9: Accelerated Build-Up of Growth Markets: Investments in First Half Year 2016

    ACCELERATED BUILD-UP OF GROWTH MARKETS INVESTMENTS IN FIRST HALF YEAR 2016 Opening of Sika plants:  2nd plant in Greece (Kryoneri (Athens), January 2016)  1st plant in Myanmar (Yangon, February 2016)  1st plant in Cambodia (Phnom Penh, February 2016)  4th plant in Canada (Vancouver, March 2016)

  10. Slide 10: Accelerated Build-Up of Growth Markets: Acquisition in First Half Year 2016

    ACCELERATED BUILD-UP OF GROWTH MARKETS ACQUISITION IN FIRST HALF YEAR 2016 L.M. Scofield, USA  US‐based market leader for concrete color additives (ready‐mixed concrete) and decorative treatments for refurbishment  Buying new technology and spreading it out to Sika’s existing customer base  Conti

  11. Slide 11: Good Start in Q3 2016: Key Initiatives Continue

    GOOD START IN Q3 2016 KEY INITIATIVES CONTINUE  Acquisition of fiber producer FRC Industries in Tuscaloosa, Alabama, USA (September 2016)  New plant in Perth, Australia (July, 2016)  New national subsidiaries in Cameroon and Djibouti (August 2016) – now 97 countries with own Sika operations Sika

  12. Slide 12: Outlook: Confirmation of 2016 Annual Targets

    OUTLOOK CONFIRMATION OF 2016 ANNUAL TARGETS  6-8% sales growth  Disproportionately higher rise in margins  Opening of 8 to 10 new factories  3 to 4 new national subsidiaries  Unknown outcome of Saint-Gobain’s hostile takeover attempt 12

  13. Slide 13: 2. Successful Strategy 2018 Execution

    2. SUCCESSFUL STRATEGY 2018 EXECUTION

  14. Slide 14: Five-Year Overview - Net Sales and EBIT

    FIVE-YEAR OVERVIEW - NET SALES AND EBIT CONTINUATION OF PROFITABLE GROWTH STRATEGY 14

  15. Slide 15: Strategy 2018: Sika's Growth Model Will Deliver

    STRATEGY 2018 SIKA’S GROWTH MODEL WILL DELIVER 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 EMPLOYED BY 20

  16. Slide 16: 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 • 333 new patents filed INNOVATION  • 20 Global Technology Centers • 51 new plants opened EMERGING M

  17. Slide 17: 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 17

  18. Slide 18: Megatrends Drive Our Growth

    MEGATRENDS DRIVE OUR GROWTH: URBANIZATION, NEW VEHICLE DESIGN & SUSTAINABILITY Increasing world population with Higher demand for urbanization and Increased safety, fire, infrastructure and megacities water, earthquake and refurbishment quality requirements solutions Sustainability: Rising demand fo

  19. Slide 19: We Are Innovation: Strong Track Record

    WE ARE INNOVATION STRONG TRACK RECORD 333 880 377 20 Patents were Employees are Invention Technology filed since dedicated to disclosures Centers 2012 Research and since 2012 world-wide Development 19

  20. Slide 20: Emerging Markets Build-Up Since 2012

    EMERGING MARKETS BUILD-UP SINCE 2012 GROWTH POTENTIAL IN NEW MARKETS 51 12.5% 20 37% New Average sales New of turnover plants growth national in Emerging opened subsidiaries Markets 20

  21. Slide 21: Acquisitions Since 2012: Growth Platforms for the Future

    ACQUISITIONS SINCE 2012 GROWTH PLATFORMS FOR THE FUTURE In all In all 19 587 7 4 Acquisitions million CHF Target Regions turnover Markets 21

  22. Slide 22: 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 22

  23. Slide 23: 3. Two Examples of Strategy Execution in the Regions

    3. TWO EXAMPLES OF STRATEGY EXECUTION IN THE REGIONS

  24. Slide 24: Strong Strategy Execution in Africa

    STRONG STRATEGY EXECUTION IN AFRICA +22% 9 sales growth in H1 2016 new plants since 2012 18 subsidiaries 688 10 added employees since 2012 24

  25. Slide 25: Major Construction Projects with Sika Products

    MAJOR CONSTRUCTION PROJECTS WITH SIKA PRODUCTS Bridge over Maputo Bay, Mozambique Dangote fertilizer plant Lagos, Nigeria Luanda International Airport, Angola Mall of Egypt, Cairo, Egypt 25

  26. Slide 26: Accelerated Build Up of Presence in USA

    ACCELERATED BUILD UP OF PRESENCE IN USA 22 plants in USA and Canada 10 new plants added since 2012 Presence in residential Investment focus 13% market through Home Depot on fast growing sales growth (2,000 stores) and metro areas in H1 2016 Lowes (1,800 stores) 26

  27. Slide 27: Hudson Yards Project NYC

    HUDSON YARDS PROJECT NYC SIKA IS HELPING TO BUILD A NEW CITY IN A CITY 27

  28. Slide 28: 4. Saint-Gobain's Hostile Takeover Attempt

    4. SAINT-GOBAIN’S HOSTILE TAKEOVER ATTEMPT

  29. Slide 29: Fundamental Reasons to Oppose Hostile Takeover Attempt by Saint-Gobain

    FUNDAMENTAL REASONS TO OPPOSE HOSTILE TAKEOVER ATTEMPT BY SAINT-GOBAIN 1. Lack of industrial logic 2. Saint-Gobain will execute control with only 16% of the capital 3. No adequate representation of public shareholders on the Board 4. Saint-Gobain is a direct competitor of Sika 5. Sika loses A- credi

  30. Slide 30: Sika Articles of Association Article 4: Restriction of Transferability

    SIKA ARTICLES OF ASSOCIATION ARTICLE 4 RESTRICTION OF TRANSFERABILITY, THE 5% THRESHOLD “The Board of Directors reserves the right to refuse an acquirer of registered shares as shareholder, if the number of registered shares held by him exceeds 5% of the total number of registered shares entered in

  31. Slide 31: 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

  32. Slide 32: Thank You for Your Attention

    THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST Bs

Sika — H1 2016 Earnings Presentation on 6ix