Sika Ag · SIX:SIKA

Sika — Investor Presentation (January 2015)

25 slides from Sika's investor presentation, Jan 15, 2015

  1. Slide 1: Dynamic Growth Continues – Record Sales in All Regions

    DYNAMIC GROWTH CONTINUES – RECORD SALES IN ALL REGIONS SIKA INVESTOR PRESENTATION, JANUARY 15, 2015

  2. Slide 2: 1. Highlights and Sales 2014

    1. HIGHLIGHTS AND SALES 2014 ® BUILDING TRUST Ds

  3. Slide 3: Highlights Sales 2014

    HIGHLIGHTS SALES 2014  Q4 with continued growth momentum  13.0% sales growth (8.3% in CHF) to CHF 5.57 billion (FY)  Record sales in all regions  Asia/Pacific with more than CHF 1 billion of sales for the first time  Sales up 15.2% in emerging markets  EBIT expected to exceed CHF 600 million 

  4. Slide 4: 13.0% Sales Growth for 2014 – Record Sales in All Regions

    13.0% SALES GROWTH FOR 2014 RECORD SALES IN ALL REGIONS + 7.9% + 13.3% + 12.8% 0.75 North America 1.04 + 15.9% 2.73 EMEA Asia/Pacific 0.64 Latin America 2013 2014 (in CHF bn, Growth at constant FX) Growth of 15.2% in Emerging Markets 4

  5. Slide 5: Accelerated Build-up of Emerging Markets Investments 2014

    ACCELERATED BUILD-UP OF EMERGING MARKETS INVESTMENTS 2014 Opening of Sika plants:  7th plant in Brazil (Aparecida de Goiânia, January 2014)  2nd plant in Indonesia (Surabaya, May 2014)  6th plant in India (Jhagadia, June 2014)  New plant in Serbia (Simanovci, September 2014)  2nd plant in Singa

  6. Slide 6: Build-up of Supply Chain in Growth Markets Investments 2014

    BUILD-UP OF SUPPLY CHAIN IN GROWTH MARKETS INVESTMENTS 2014 Opening of Sika plants in North America:  11th plant in the USA (Denver, May 2014)  12th plant in the USA (Atlanta, July 2014) USA USA 6

  7. Slide 7: 2. Sales Performance 2014

    2. SALES PERFORMANCE 2014 ® BUILDING TRUST Ds

  8. Slide 8: Sales Growth by Quarter – 2013 / 2014

    SALES GROWTH BY QUARTER – 2013 / 2014 DYNAMIC GROWTH MOMENTUM 23.3% 17.8% 9.2% 14.0% 9.6% 11.7% at constant currency 10.6% acquisition 8.2% 7.4% 3.3% 5.4% 5.1% organic 1.2% 1.3% -0.2% 7.0% 7.3% 8.2% 14.1% 6.6% 6.3% 3.8% +1.1% -1.3% Q1 PY Q2 PY Q3 PY Q4 PY Q1 CY Q2 CY Q3 CY Q4 CY QuarterlyS In CHF bn

  9. Slide 9: Sales Growth by Region 2014

    SALES GROWTH BY REGION 2014 In CHF bn + 13.3% + 7.9% + 12.8% + 15.9% Growth (at constant FX) - 2.6% - 3.0% - 6.0% - 13.4% FX impact + 9.2% + 0.0% + 3.5% + 4.9% Acquisition 2.73 19% 81% Construction Industry 1.04 0.75 0.64 EMEA North America Asia/Pacific Latin America 9

  10. Slide 10: Five-Year Overview Net Sales

    FIVE-YEAR OVERVIEW NET SALES In CHF bn Sales growth in LC 5.80 18.0% Sales growth in CHF 5.60 15.5% 5.57 16.0% 5.40 13.0% 14.0% 5.20 5.14 12.0% 10.2% 5.00 10.0% 4.83 8.3% 4.80 9.4% 8.0% 6.3% 4.56 5.8% 4.60 6.0% 4.42 6.5% 4.40 5.3% 4.0% 4.20 3.2% 2.0% 4.00 0.0% 2010 2011 2012 2013 2014 10

  11. Slide 11: 3. Strategy 2018

    3. STRATEGY 2018 ® BUILDING TRUST Ds

  12. Slide 12: Megatrends Drive Our Growth: Urbanization, New Vehicle Design & Sustainability

    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

  13. Slide 13: Strategy 2018: Sika's Growth Model Will Deliver

    STRATEGY 2018: SIKA’S GROWTH MODEL WILL DELIVER MARKET PENETRATION 6-8% GROWTH PER YEAR INNOVATION 42% - 45% OF SALES IN EMERGING MARKETS EMERGING MARKETS > 10% OPERATING PROFIT > 6% OPERATING FREE CASH FLOW ACQUISITIONS > 20% RETURN ON CAPITAL EMPLOYED VALUES 13 |

  14. Slide 14: 4. Rejection of Planned Change of Control to Saint-Gobain

    4. REJECTION OF PLANNED CHANGE OF CONTROL TO SAINT-GOBAIN 14

  15. Slide 15: Key Events of the Last Weeks

    KEY EVENTS OF THE LAST 5 WEEKS  Dec 5: In the evening board and management were informed of transaction by family and Saint-Gobain  limited discussions between Sika and Saint-Gobain during weekend, with Saint-Gobain rejecting constructive suggestions to mitigate flaws of current structure  Dec 8:

  16. Slide 16: Key Events of the Last Weeks (cont.)

    KEY EVENTS OF THE LAST 5 WEEKS (CONT.)  Dec 17: Sika presented alternative proposals to reverse value loss  Dec 23: Ethos and 12 pension funds and investors representing 1.7% of the capital, requested to include an item on the agenda of the Extraordinary General Meeting to delete the opting out cl

  17. Slide 17: Why Sika Cannot Support Proposed Transaction

    WHY SIKA CANNOT SUPPORT PROPOSED TRANSACTION Transaction structure as planned by Saint-Gobain Key implications & concerns  Acquisition of control through majority of  Public shareholders (84% of capital) votes deprived of adequate compensation for  Full consolidation of Sika change of control / f

  18. Slide 18: Sika's Growth Model Delivers

    SIKA’S GROWTH MODEL DELIVERS  Market penetration  High growth (2010-2013 CAGR)(1)  From roof to floor  Sika: +5.2%  From new-build to refurbishment  Saint-Gobain CP (ES): -0.6% / -4.4%(2)  Push and pull market channels  Global technology leadership  High profitability (2013A EBIT Margin)(1)

  19. Slide 19: Deal Impairs Success of Sika

    DEAL IMPAIRS SUCCESS OF SIKA  Increased complexity: numerous “at arm’s length” contracts envisaged in all countries with dual presence  Each transaction needs to fully comply with transfer pricing rules  Significant implementation and ongoing monitoring effort and cost  Protection of business s

  20. Slide 20: Overlaps and Touchpoints Sika and Saint-Gobain

    OVERLAPS AND TOUCHPOINTS SIKA AND SAINT-GOBAIN SAINT GOBAIN PORTFOLIO  Saint-Gobain mortar business (Weber) is a direct competitor to Sika Packaging Weber € 3.5bn € 2.3bn  Sika’s mortar business is operationally fully integrated in the organization and core Other Construction element of growth str

  21. Slide 21: Overstated Synergy Potential

    OVERSTATED SYNERGY POTENTIAL Our preliminary views on run rate synergy potential (impact on EBIT in EURm) Currently planned structure Integration of Weber into Sika in EURm in EURm 200 200 Revenue synergies Capex savings 100 100 Cost synergies Total synergy potential General overhead Dis-synergies s

  22. Slide 22: Potential Alternatives to Reverse Value Loss

    POTENTIAL ALTERNATIVES TO REVERSE VALUE LOSS  Leading independent Construction Chemicals & Adhesives player with strong anchor INTEGRATION WITH SAINT- shareholder and proven management GOBAIN MORTARS UNDER  Removes key areas of market conflicts, but key implementation risks remain SIKA UMBRELLA 

  23. Slide 23: Sika Open for Constructive Dialogue

    SIKA OPEN FOR CONSTRUCTIVE DIALOGUE  …that addresses obvious flaws of planned transaction  …that allows Sika to continue to flourish and that supports integrity of our business approach  …that allows optimal materialization of synergy potential  …that allows Sika’s public shareholders to (at lea

  24. Slide 24: 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

  25. Slide 25: Thank You for Your Attention

    THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST By

Sika — Investor Presentation (January 2015) on 6ix