Sika Ag · SIX:SIKA

Sika — FY2013 Earnings Presentation

45 slides from Sika's earnings presentation, Mar 4, 2014

  1. Slide 1: Full-Year Results 2013

    FULL-YEAR RESULTS 2013 RECORD YEAR IN SALES, PROFIT AND OPERATING FREE CASH FLOW ZURICH, MARCH 4, 2014

  2. Slide 2: Table of Contents

    TABLE OF CONTENTS 1 HIGHLIGHTS Jan Jenisch, CEO 2 RESULTS 2013 Adrian Widmer, CFO 3 STRATEGY Jan Jenisch, CEO 4 OUTLOOK Jan Jenisch, CEO 5 QUESTIONS & ANSWERS 2

  3. Slide 3: 1. Highlights

    1. HIGHLIGHTS ® BUILDING TRUST Bs

  4. Slide 4: Highlights 2013

    HIGHLIGHTS 2013  Record year in sales, profit, operating free cash flow  9.4% sales growth (6.5% in CHF) to CHF 5,142.2 million  Growth momentum in all regions  Sales up 17.2% in emerging markets  23.8% increase in net profit to CHF 344.7 million  Operating free cash flow of CHF 432.7 million

  5. Slide 5: Key Figures: Record Results

    KEY FIGURES RECORD RESULTS in CHF mn 2012 2013 Δ% Net sales 4,828.9 5,142.2 +6.5% Gross results as % of net sales 52.2 52.4 EBITDA 573.1 675.9 +17.9% EBIT 433.0 523.5 +20.9% Net profit 278.5 344.7 +23.8% Operating free cash flow 302.5 432.7 + 43.0% ROCE in % 18.5 21.0 5

  6. Slide 6: Sales Growth by Region

    SALES GROWTH BY REGION +2.3% + 8.5% + 12.7% 706 711 North America + 15.1% 2,275 2,470 931 974 EMEA Asia/Pacific 586 623 2012 2013 Latin America (Growth at constant FX) 6

  7. Slide 7: Emerging Markets: 38% of Sales in Emerging Markets

    EMERGING MARKETS 38% OF SALES IN EMERGING MARKETS Net sales 1990: CHF 1,095 million Net sales 2013: CHF 5,142 million 38% 9% 62% 91% Mature markets Emerging markets 7

  8. Slide 8: Five-Year Overview: Net Sales

    FIVE-YEAR OVERVIEW NET SALES in CHF mn, at actual FX, growth development 6.5% 6.2% 5,142 5.8% 3.2% 4,829 4,564 4,422 4,162 -10.1% 2009 2010 2011 2012 2013 8

  9. Slide 9: Five-Year Overview: EBIT

    FIVE-YEAR OVERVIEW EBIT in CHF mn, at actual FX, EBIT margin 523 10.2% 9.9% 9.0% 439 433 8.3% 7.6% 344 347 2009 2010 2011 2012 2013 9

  10. Slide 10: Accelerated Build-Up of Emerging Markets Investments in 2013

    ACCELERATED BUILD-UP OF EMERGING MARKETS INVESTMENTS IN 2013 Opening of first Sika plant:  Laos (Xayaburi, March 2013)  Iraq (Erbil, June 2013)  Ukraine (Kiev, June 2013)  Angola (Luanda, November 2013) Iraq Ukraine 10

  11. Slide 11: Accelerated Build-Up of Emerging Markets Investments in 2013

    ACCELERATED BUILD-UP OF EMERGING MARKETS INVESTMENTS IN 2013  3rd plant in Russia (St. Petersburg, March 2013)  4th plant in Colombia (Barranquilla, May 2013)  2nd plant in South Africa (Johannesburg, June 2013)  11th plant in China (Chongqing, August 2013)  2nd plant in Vietnam (Hanoi, Septemb

  12. Slide 12: Leading Role in Market Consolidation: Acquisitions 2013

    LEADING ROLE IN MARKET CONSOLIDATION ACQUISITIONS 2013 Company Country Target Market LCS Optiroc Singapore, Flooring Malaysia Refurbishment Building Adhesives Business of Netherlands Sealing & Bonding AkzoNobel Flooring, Refurbishment Radmix Resources Pty Ltd and ASF Australia Concrete Pty Ltd JMTex

  13. Slide 13: 2. Results 2013

    2. RESULTS 2013 ® BUILDING TRUST Bs

  14. Slide 14: Key Figures: Strong Improvement of Key Financials

    KEY FIGURES STRONG IMPROVEMENT OF KEY FINANCIALS in CHF mn 2012 2013 Δ% Net sales 4,828.9 5,142.2 +6.5% Gross results as % of net sales 52.2 52.4 EBITDA 573.1 675.9 +17.9% EBIT 433.0 523.5 +20.9% Net profit 278.5 344.7 +23.8% Operating free cash flow 302.5 432.7 + 43.0% ROCE in % 18.5 21.0 14

  15. Slide 15: Revenues 2013: Balanced Sales Growth

    REVENUES 2013 BALANCED SALES GROWTH in CHF mn 2012 2013 Δ % Net sales 4,828.9 5,142.2 + 313.3 +6.5 Organic growth + 285.2 +5.9 Acquisition effect + 168.8 +3.5 Currency effect - 140.7 -2.9 15

  16. Slide 16: Sales Growth by Quarter: Dynamic Growth Momentum

    SALES GROWTH BY QUARTER DYNAMIC GROWTH MOMENTUM 17.8% Net sales 12 month rolling 9.6% 10.6% 8.2% 3.3% 1.2% at constant currency 7.0% 7.3% 8.2% acquisition organic -0.2% +1.1% -1.3% in CHF mn Q1 Q2 Q3 Q4 Quarterly sales 1,043.1 1,359.4 1,405.2 1,334.5 16

  17. Slide 17: Sales Growth by Region: All Regions Contributed

    SALES GROWTH BY REGION ALL REGIONS CONTRIBUTED + 8.5 % + 2.3 % + 12.7 % + 15.1 % Growth (at constant FX) + 0.1 % - 1.5 % - 8.1 % - 8.9 % FX impact + 6.4 % + 0.0 % + 0.6 % + 3.0 % Acquisition 19% 81% Construction Industry 38% 62% 2,470 711 974 623 Mature markets EMEA North Asia/Pacific Latin America

  18. Slide 18: Gross Result Development: Continuous Improvement

    GROSS RESULT DEVELOPMENT CONTINUOUS IMPROVEMENT 2009 2010 2011 2012 2013 55.1 % 53.9 % 50.5 % 52.2 % 52.4 % Gross result (trailing 12 months) 18

  19. Slide 19: Profit & Loss: Strong Improvement of Key Financials

    PROFIT & LOSS STRONG IMPROVEMENT OF KEY FINANCIALS in CHF mn 2012 NS 2013 NS Growth Net sales 4,828.9 100 % 5,142.2 100 % + 6.5% Gross results 2,519.3 52.2 % 2,695.6 52.4 % + 7.0% Personnel cost -1,037.2 -21.5 % -1,031.1 -20.1 % - 0.6% Other OPEX -909.0 -18.8 % -988.6 -19.2 % + 8.8% Depreciation -14

  20. Slide 20: Consolidated Balance Sheet

    CONSOLIDATED BALANCE SHEET in CHF mn 31.12.2012 31.12.2013 Δ% Cash and cash equivalents 994.2 1,028.3 + 34.1 Other current assets 1,503.5 1,559.6 + 56.1 Current assets 2,497.7 2,587.9 + 90.2 Non-current assets 1,782.5 2,144.1 + 361.6 Total assets 4,280.2 4,732.0 + 451.8 Current liabilities 1.043.5 1

  21. Slide 21: Net Working Capital: Continuing Improvement

    NET WORKING CAPITAL CONTINUING IMPROVEMENT at actual FX rates in CHF mn 2011 YE 2012 YE 2013 YE Net sales 4,563.7 4,828.9 5,142.2 = Total NWC year end 904.9 901.0 888.7 In % NS 19.8 % 18.7 % 17.3 % at constant FX rates 20.9 20.1 19.6 19.1 18.5 2009 2010 2011 2012 2013 21

  22. Slide 22: Cash Flow Statement

    CASH FLOW STATEMENT in CHF mn 2012 2013 Cash flow from operating activities 427.3 574.0 CapEx/Sale of assets/Acquisitions -139.0 -555.0 Free cash flow 288.3 19.0 Acquisitions/Financial assets 14.2 413.7 Operating free cash flow 302.5 432.7 Free cash flow 288.3 19.0 Cash flow from financing activitie

  23. Slide 23: Five Year Overview: Net Profit

    FIVE YEAR OVERVIEW NET PROFIT in CHF mn, at actual FX, net profit margin 7.0% 345 6.7% 311 279 5.8% 5.4% 226 215 4.7% 2009 2010 2011 2012 2013 23

  24. Slide 24: Five Year Overview: Operating Free Cash Flow

    FIVE YEAR OVERVIEW OPERATING FREE CASH FLOW in CHF mn, at actual FX, as % of net sales 433 8.9% 8.4% 369 7.5% 332 6.3% 303 4.1% 186 2009 2010 2011 2012 2013 24

  25. Slide 25: Dividend Proposal: Board Proposes 12% Higher Dividend

    DIVIDEND PROPOSAL BOARD PROPOSES 12% HIGHER DIVIDEND Dividend payment CHF 57.00 per bearer share CHF 9.50 per registered share in CHF mn 2012 2013 Group profit (after minorities) 276.9 342.2 Dividend out of retained earnings 129.2 144.4 Total payout ratio 46.7 % 42.2 % 25

  26. Slide 26: 3. Strategy 2018

    3. STRATEGY 2018 ® BUILDING TRUST Bs

  27. Slide 27: Attractive Industry and Markets

    ATTRACTIVE INDUSTRY AND MARKETS 27

  28. Slide 28: Attractive Industry and Markets: Significant Growth Potential

    ATTRACTIVE INDUSTRY AND MARKETS SIGNIFICANT GROWTH POTENTIAL Market Volume 2013 Market Volume 2018* CHF 60 billion > CHF 70 billion Industry Concrete Industry Concrete Water- Refurbish- Water- Refurbish- proofing proofing ment ment Roofing Roofing Sealing & Sealing & Bonding Flooring Bonding Floorin

  29. Slide 29: Growing Demand for Sika Products: Urbanization and Megacities

    GROWING DEMAND FOR SIKA PRODUCTS URBANIZATION AND MEGACITIES  Increasing world population fuels construction markets  Higher demand for performance / specialty concrete  More waterproofing solutions needed  Functional sealing and building envelopes  Innovative roofing solutions  Increased safe

  30. Slide 30: Growing Demand for Sika Products: Lighter, Safer Vehicles

    GROWING DEMAND FOR SIKA PRODUCTS TREND FOR LIGHTER, SAFER VEHICLES  New materials like carbon fiber require bonding solutions  Composite body structures need bonding instead of welding  Adhesives enable stiffer, lighter, safer metal structures  Modular production concepts are based on fast, high

  31. Slide 31: Growing Demand for Sika Products: Sustainability

    GROWING DEMAND FOR SIKA PRODUCTS TREND FOR SUSTAINABILITY  More efficient use of limited natural resources and energy («green cities»)  Demand for longer life cycles of infrastructure and buildings  Demand for low-energy housing  Drive towards higher recyclability of materials  Demand for safe-

  32. Slide 32: Fragmented Global Industry Offers Significant Growth Potential

    FRAGMENTED GLOBAL INDUSTRY OFFERS SIGNIFICANT GROWTH POTENTIAL Construction Chemical Market 2013 > CHF 50 billion Sika Competitor 1 Competitor 2 Competitor 3 Top 5 companies Competitor 4 with 26% Others market share 32

  33. Slide 33: Sika's Position & Competitive Advantages

    SIKA’S POSITION & COMPETITIVE ADVANTAGES 33

  34. Slide 34: Focus on Target Markets

    FOCUS ON 7 TARGET MARKETS With our core competencies bonding, sealing, damping, reinforcing and protecting Concrete Waterproofing Roofing Flooring Sealing & Bonding Refurbishment Industry 34

  35. Slide 35: Strong Global Position: Competitive Advantages for Profitable Growth

    STRONG GLOBAL POSITION: COMPETITIVE ADVANTAGES FOR PROFITABLE GROWTH  World market leader in construction chemicals  Leading adhesive producer for industrial markets  Successful focus on innovation (73 patents in 2013)  First mover in emerging markets (38% of sales)  Global footprint with over

  36. Slide 36: Strategy and Growth Model

    STRATEGY AND GROWTH MODEL BUILDING TRUST

  37. Slide 37: Strategy 2018: Building Trust

    STRATEGY 2018 BUILDING TRUST The Sika Growth Model ensures the long-term success and the profitable growth of our company. We aim for global market leadership in our 7 target markets through cross selling, life-cycle management and the strengthening of our brand. The core of our business is our inno

  38. Slide 38: Strategy 2018: Sika's Growth Model Will Deliver

    STRATEGY 2018 SIKA’S GROWTH MODEL WILL DELIVER 1. Market penetration - from roof to floor (cross selling, 7 target markets, KPM) - from new-build to refurbishment (life-cycle management) - push and pull market channels (specification, branding) 2. Global technology leadership with continuous innovat

  39. Slide 39: Targets 2018

    TARGETS 2018 BUILDING TRUST

  40. Slide 40: Strategy 2018 Targets

    STRATEGY 2018 TARGETS  Annual sales growth of 6% to 8% (at constant exchange rates, including acquisitions)  Emerging markets with 42% to 45% of group sales by 2018  Operating profit (EBIT) above 10% of net sales  Operating free cash flow above 6% of net sales  ROCE above 20%  Maintain A- rati

  41. Slide 41: 4. Outlook

    4. OUTLOOK BUILDING TRUST

  42. Slide 42: Outlook 2014

    OUTLOOK 2014  Sika expects 6 – 8% sales growth (at constant exchange rates)  Continued build-up of growth markets with 8 new factories  Asia/Pacific: double-digit growth expected in China and Southeast Asia, stable volumes in Japan, Korea and Pacific  Latin America: double-digit growth expected

  43. Slide 43: 5. Questions & Answers

    5. QUESTIONS & ANSWERS ® BUILDING TRUST Bs

  44. Slide 44: 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

  45. Slide 45: Thank You for Your Attention

    THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST Bs

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