Slide 1: Growth of 14.1% - New Records in Sales and Profit
GROWTH OF 14.1% - NEW RECORDS IN SALES AND PROFIT FIRST NINE MONTHS 2018 SIKA INVESTOR PRESENTATION OCTOBER 25, 2018
Slide 2: 1. Highlights First Nine Months 2018
1. HIGHLIGHTS FIRST NINE MONTHS 2018
Slide 3: Growth of 14.1% - New Records in Sales and Profit
GROWTH OF 14.1% - NEW RECORDS IN SALES AND PROFIT CONTINUING HIGH OPERATING SPEED 1. New records in sales, EBIT and net profit +14.1% sales growth in local currencies (15.0% in CHF) to CHF 5,322.7 million +9.0% higher EBIT to CHF 728.9 million (excluding one-off costs incurred in connection with
Slide 4: Key Figures First Nine Months 2018
KEY FIGURES FIRST NINE MONTHS 2018 RECORD RESULTS – STRONG TOP LINE MOMENTUM CONTINUES in CHF mn 2017 2018 Δ% Net sales 4,627.5 5,322.7 +15.0% Gross results as % of net sales 54.7 53.3 EBITDA 797.9 880.0 +10.3% EBIT 669.0 728.9 +9.0% Net profit 477.4 527.7 +10.5% 4
Slide 5: 14.1% Sales Growth in the First Nine Months 2018
14.1% SALES GROWTH IN THE FIRST NINE MONTHS 2018 SIKA WELL ON TRACK 18% 14.1% 16% 14% 12% 7.1% 10% 7.9% 8% 6.3% 2.4% in LC 1.1% 6% acquisition 4% 7.0% organic 2% 5.2% 5.5% 0% 9M 2016 9M 2017 9M 2018 in CHF mn 9M 2016 9M 2017 9M 2018 Net sales 4,331.8 4,627.5 5,322.7 5
Slide 6: Sales First Nine Months 2018 - Growth in All Regions
SALES FIRST NINE MONTHS 2018 GROWTH IN ALL REGIONS +18.0% +9.6% +5.0% +32.1% Growth in CHF +14.4% +13.0% +4.8% +29.9% Growth in LC +3.6% -3.4% +0.2% +2.2% FX impact +7.2% +5.0% +0.0% +22.7% Acquisition 23% 77% Construction Industry EMEA Americas Asia/Pacific Global Business 6
Slide 7: Strong Growth Momentum Continues in First Nine Months
STRONG GROWTH MOMENTUM CONTINUES IN FIRST NINE MONTH 14.1% SALES GROWTH (15.0% IN CHF) + 14.4% + 4.8% + 29.9% + 13.0% 852 687 1,383 2,400 Asia/Pacific Global Business Americas EMEA 9M 2017 9M 2018 (in CHF mn, growth in LC) 7
Slide 8: Development of Sales First Nine Months
DEVELOPMENT OF SALES FIRST NINE MONTHS STRONG GROWTH IN MATURE AND EMERGING MARKETS in CHF mn 5’400 43 5’200 328 5’000 187 4’800 5,323 137 4’600 4’400 4,628 4’200 9M 2017 Organic Growth Organic Growth Acquisitions Translation 9M 2018 Mature Market Emerging Impact Market 8
Slide 9: Continuing High Operating Speed - Closing of Acquisitions
CONTINUING HIGH OPERATING SPEED IN 2018 CLOSING OF 3 ACQUISITIONS Company Country Target Market Faist ChemTec Global Global Business Index Construction Systems and Italy Roofing & Waterproofing Products Polypag Switzerland Sealing & Bonding Total annual sales: CHF 345 million Faist ChemTec Index Con
Slide 10: Continuing High Operating Speed - Expansion in Emerging Markets
CONTINUING HIGH OPERATING SPEED IN 2018 EXPANSION IN EMERGING MARKETS New subsidiaries: Honduras (February 2018) Now present in 101 countries with own national subsidiaries 10
Slide 11: Continuing High Operating Speed - Investments in New Plants
CONTINUING HIGH OPERATING SPEED IN 2018 INVESTMENTS IN NEW PLANTS Opening of Sika plants: New mortar plant Vietnam (Hanoi, March 2018) 1st admixture plant Senegal (Dakar, April 2018) New admixture factory Saudi Arabia (Dammam, June 2018) New admixture and mortar plant Azerbaijan (Baku, Juily
Slide 12: 2. Successful Strategy Execution
2. SUCCESSFUL STRATEGY EXECUTION
Slide 13: Sika's Growth Model Delivers - Key Investments Since 2015
SIKA’S GROWTH MODEL DELIVERS KEY INVESTMENTS SINCE 2015 - Successful Target Market concept Market Penetration - Megatrends driving growth - 217 new patents filed Innovation - 20 Global Technology Centers Emerging Markets - 35 new plants opened - 11 new national subsidiaries Acquisitions
Slide 14: Continued Growth in Sales and Profit (Full Year)
SIKA’S GROWTH MODEL DELIVERS CONTINUED GROWTH IN SALES AND PROFIT (FULL YEAR) NET SALES NET 7000 SALES 16.0% EBIT 1100 14.3% 16.0% 1000 13.8% % growth in local currencies as % of net sales 14.0% 6500 14.0% 900 12.3% 5.3% 9.4% 13.0% 6.2% 5.5% 9.0% 11.4% 12.0% 800 12.0% 6000 10.2% 700 10.0% 9.0% 10.0%
Slide 15: Continued Increase in ROCE (Full Year)
SIKA’S GROWTH MODEL DELIVERS CONTINUED INCREASE IN ROCE (FULL YEAR) RETURN ON CAPITAL EMPLOYED (ROCE) in % * 29.8% 28.7% 24.3% 23.3% 21.0% 18.5% 15.6% 2011 2012 2013 2014 2015 2016 2017 15
Slide 16: Market Penetration
MARKET PENETRATION ® BUILDING TRUST Bs
Slide 17: Sika's Market Potential
SIKA’S MARKET POTENTIAL LARGE AND GROWING MARKET SEGMENTS TOTAL MARKET SIZE 2017 2020 > CHF 70 BILLION CHF 80 BILLION INDUSTRY CONCRETE INDUSTRY CONCRETE WATER- FLOORING WATER- PROOFING FLOORING PROOFING ROOFING ROOFING SEALING & SEALING & BONDING BONDING REFURBISHMENT REFURBISHMENT 17
Slide 18: 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 18
Slide 19: Growth Model with Early Market Penetration
GROWTH MODEL WITH EARLY MARKET PENETRATION FROM NEW-BUILD TO REFURBISHMENT SIKA HAS SOLUTIONS FOR ALL MARKETS Long-term market potential Sika Repair and Sika’s market potential refurbishment Higher building standards Infrastructure Emerging markets Developing markets Mature markets 19
Slide 20: Innovation
INNOVATION ® BUILDING TRUST Bs
Slide 21: Innovation - Strong Track Record
INNOVATION STRONG TRACK RECORD More than 217 900 283 20 patents were employees are invention Technology filed since dedicated to disclosures Centers 2015 Research and since 2015 worldwide Development 21
Slide 22: Accelerated Build-up of Emerging Markets
ACCELERATED BUILD-UP OF EMERGING MARKETS
Slide 23: Emerging Markets Build-up Since 2015
EMERGING MARKETS BUILD-UP SINCE 2015 CAPTURING GROWTH POTENTIAL IN NEW MARKETS 35 5 11 36% new acquisitions new of sales in plants national emerging markets opened subsidiaries 23
Slide 24: Sika's 101 Subsidiaries
SIKA’S 101 SUBSIDIARIES ROUILOING TRUST vin HONDURAS - 2018 E fe 5 : a a ia: é g me) Oe ee 1 om om A i. i g : 8 g i z 2 i ae 2 = . : = a y aa AO: i e i Hl TN 7 Oe Bi iy. 24
Slide 25: Acquisitions
ACQUISITIONS ® BUILDING TRUST Bs
Slide 26: Acquisitions Since 2015
ACQUISITIONS SINCE 2015 GROWTH PLATFORMS FOR THE FUTURE In all In all 18 745 7 4 acquisitions million CHF Target regions additional Markets turnover 26
Slide 27: Sika Will Act as Market Consolidator
SIKA WILL ACT AS MARKET CONSOLIDATOR FRAGMENTATION OFFERS ACQUISITION OPPORTUNITIES CONSTRUCTION CHEMICAL MARKET 2017 > CHF 60 BILLION Sika Top 10 companies with a combined market share of 40% Other 27
Slide 28: Values and Principles
VALUES AND PRINCIPLES ® BUILDING TRUST Bs
Slide 29: Sika's Values and Principles
SIKA’S VALUES AND PRINCIPLES STRONG CORPORATE CULTURE Customer first Courage for innovation Sustainability & integrity Empowerment and respect Manage for results 29
Slide 30: 3. Targets 2020
3. TARGETS 2020 ® BUILDING TRUST Bs
Slide 31: Sika's Growth Strategy 2020 Confirmed
SIKA’S GROWTH STRATEGY 2020 CONFIRMED TO BE UPDATED IN 2019 MARKET PENETRATION 6 - 8% ANNUAL GROWTH 30 NEW PLANTS INNOVATION 105 NATIONAL SUBSIDIARIES EMERGING MARKETS 14 - 16% EBIT MARGIN PER YEAR ACQUISITIONS > 10% OPERATING FREE CASH FLOW PER YEAR VALUES > 25% ROCE PER YEAR 31
Slide 32: 4. Outlook 2018
4. OUTLOOK 2018 ® BUILDING TRUST Bs
Slide 33: Higher Raw Material Costs
HIGHER RAW MATERIAL COSTS PRESSURE ON MARGINS COUNTERED WITH HIGHER SALES PRICES 56.0% 1.06 Gross 55.0% 1.04 Margin 54.0% 1.02 Raw 53.0% 1 Material 52.0% 0.98 Prices 51.0% 0.96 Sales Price Increases 50.0% 0.94 2016 2017 2018* Increasing raw material prices in several phases since end of 2016 Con
Slide 34: Strong Outlook for 2018
STRONG OUTLOOK FOR 2018 CONTINUATION OF SUCCESSFUL GROWTH STRATEGY Confirmation of sales target of more than CHF 7 billion Volatile and rising raw material prices will continue to be a challenge Double-digit growth in both EBIT and net profit 34
Slide 35: Thank You for Your Attention
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Slide 36: 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