Sika Ag · SIX:SIKA

Sika — H1 2017 Earnings Presentation

44 slides from Sika's earnings presentation, Jul 27, 2017

  1. Slide 1: Strong Sales and Record Results First Half 2017

    STRONG SALES AND RECORD RESULTS FIRST HALF 2017 SIKA INVESTOR PRESENTATION JULY 27, 2017

  2. Slide 2: Table of Contents

    TABLE OF CONTENTS 1. HIGHLIGHTS FIRST HALF 2017 2. STRATEGY 3. OUTLOOK 2

  3. Slide 3: 1. Highlights First Half 2017

    1. HIGHLIGHTS FIRST HALF 2017

  4. Slide 4: Strong Sales and Record Results

    STRONG SALES AND RECORD RESULTS 1. Record results  +8.1% sales growth in local currencies, CHF 2,994.9 million in sales  CHF 402.1 million EBIT (+13.7%)  CHF 285.7 million net profit (+16.0%)  28.0% ROCE (HY 2016: 25.5%) 2. Key investments  3 new factories in Mexico, Kazakhstan and Tanzania  1

  5. Slide 5: Key Figures First Half 2017

    KEY FIGURES FIRST HALF 2017 RECORD RESULTS – STRONG MOMENTUM CONTINUES in CHF mn 2016 2017 Δ% Net sales 2,806.2 2,994.9 6.7% Gross results as % of net sales 55.6 55.1 EBITDA 439.7 488.2 +11.0% EBIT 353.7 402.1 +13.7% Net profit 246.3 285.7 +16.0% Operating free cash flow 106.0 63.0 ROCE in % 25.5 28

  6. Slide 6: First Half Sales Growth

    FIRST HALF SALES GROWTH 8.1% SALES GROWTH IN THE FIRST HALF 2017 12% 10% 8.1% 8% 7.6% 1.6% 2.4% 6% 5.6% 1.9% in LC 4% acquisition 6.0% 5.7% organic 3.7% 2% 0% 1HY 2015 1HY 2016 1HY 2017 in CHF mn 1HY 2015 1HY 2016 1HY 2017 Net sales 2,625.2 2,806.2 2,994.9 6

  7. Slide 7: Sales First Half 2017 Growth in All Regions

    SALES FIRST HALF 2017 GROWTH IN ALL REGIONS +2.8% +19.0% +4.9% +5.0% Growth in CHF +7.0% +17.4% +2.7% +4.1% Growth in LC -4.2% +1.6% +2.2% +0.9% FX impact +1.7% +8.7% +0.0% +1.3% Acquisition 22% 78% Construction Industry EMEA North America Latin America Asia/Pacific 7

  8. Slide 8: First Half 2017 – Growth in All Regions

    FIRST HALF 2017 – GROWTH IN ALL REGIONS 8.1% SALES GROWTH (6.7% IN CHF) + 7.0% + 17.4% + 4.1% 525 + 2.7% North America 1,372 535 287 EMEA Asia/Pacific Latin America HY1 2016 HY1 2017 (in CHF mn, growth in LC) 8

  9. Slide 9: Six-Year Overview – Half-Year Figures

    SIX-YEAR OVERVIEW – HALF-YEAR FIGURES CONTINOUSLY IMPROVING MARGINS 9

  10. Slide 10: 2 Larger Acquisitions with Full Effect in 2017: Rmax

    2 LARGER ACQUISITIONS WITH FULL EFFECT IN 2017 ACQUISITIONS AS GROWTH PLATFORM Rmax Operating, LLC, USA (announced Dec 16, closing Jan 17)  Market leader in the production of polyiso insulation products for complete Building Envelope solutions (roofing and wall systems)  CHF 75 million sales  New

  11. Slide 11: 2 Larger Acquisitions with Full Effect in 2017: Bitbau Dörr

    2 LARGER ACQUISITIONS WITH FULL EFFECT IN 2017 ACQUISITIONS AS GROWTH PLATFORM Bitbau Dörr, Austria (closing end Feb 17)  Leading waterproofing system manufacturer  CHF 50 million sales  Sika will be able to offer its customers a wider range of durable, high-grade waterproofing systems based on p

  12. Slide 12: Key Investments First Half 2017 Expansion in Emerging Markets

    KEY INVESTMENTS FIRST HALF 2017 EXPANSION IN EMERGING MARKETS New subsidiary:  Senegal (April 2017) Now present in 98 countries with own national subsidiaries Opening of Sika plants:  5th plant in Mexico (Coatzacoalcos, March 2017)  New and expanded site in Kazakhstan (Almaty, May 2017)  1st pla

  13. Slide 13: Key Investments Continue in Second Half 2017

    KEY INVESTMENTS CONTINUE IN SECOND HALF 2017 EXPANSION IN EMERGING MARKETS Opening of Sika plants:  New plant in Russia (Lobnya, July 2017) 13

  14. Slide 14: 2. Successful Strategy Execution

    2. SUCCESSFUL STRATEGY EXECUTION

  15. Slide 15: Strategic Targets Confirmed for 2020

    STRATEGIC TARGETS CONFIRMED FOR 2020 SIKA’S GROWTH MODEL WILL DELIVER 1) Performance 2) Market Penetration 3) Innovation 4) Accelerated build-up of Emerging Markets 5) Acquisitions 6) Values 7) Targets 2020 15

  16. Slide 16: 1) Performance

    1) PERFORMANCE ® BUILDING TRUST Ds

  17. Slide 17: Sika's Growth Model Delivers: Key Investments Since 2012

    SIKA’S GROWTH MODEL DELIVERS KEY INVESTMENTS SINCE 2012 PILLARS OF THE GROWTH MODEL ACHIEVEMENTS PILLARS OF THE GROWTH MODEL ACHIEVEMENTS MARKET PENETRATION  • Successful Target Market concept  • Megatrends driving growth INNOVATION  • 20 Global Technology Centers • 370 new patents filed EMERGING

  18. Slide 18: Continued Growth in Sales and Profit (Full Year)

    SIKA’S GROWTH MODEL DELIVERS CONTINUED GROWTH IN SALES AND PROFIT (FULL YEAR) 18

  19. Slide 19: 22 Consecutive Quarters of Margin Improvement

    SIKA’S GROWTH MODEL DELIVERS 22 CONSECUTIVE QUARTERS OF MARGIN IMPROVEMENT PERIODIC EBIT MARGINS 16% 15% HY 2017 14% 2016 13% 2015 12% 2014 11% 10% 2013 9% 8% 7% 2012 6% 2011 5% HY Q3 Q4 19

  20. Slide 20: 2) Market Penetration

    2) MARKET PENETRATION ® BUILDING TRUST Ds

  21. Slide 21: Sika's Market Potential

    SIKA’S MARKET POTENTIAL LARGE AND GROWING MARKET SEGMENTS TOTAL MARKET SIZE 2016 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 21

  22. Slide 22: Megatrends Drive Our Growth

    MEGATRENDS DRIVE OUR GROWTH URBANIZATION, NEW VEHICLE DESIGN & SUSTAINABILITY New modular Increasing world Increased safety, fire, vehicle population with water, earthquake and manufacturing urbanization and quality requirements concepts need fast, megacities high strength bonding systems Rising dem

  23. Slide 23: 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 23

  24. Slide 24: Growth Model with Early Market Penetration

    GROWTH MODEL WITH EARLY MARKET PENETRATION FROM NEW BUILD TO REFURBISHMENT Sika‘s Market Potential Sika‘s long-term Repair & market potential Sika is ideally positioned Refurbishment to profit from all phases of the construction life- Concrete cycle Market Education & repair, mortars, roofing, floor

  25. Slide 25: 3) Innovation

    3) INNOVATION ® BUILDING TRUST Ds

  26. Slide 26: Innovation Strong Track Record

    INNOVATION STRONG TRACK RECORD More than More than More than Established 370 890 400 20 patents were employees are invention Technology filed since dedicated to disclosures Centers 2012 Research and since 2012 world-wide Development 26

  27. Slide 27: Sika Innovations Drive Growth: Automotive Vehicle Content

    SIKA INNOVATIONS DRIVE GROWTH E.G. INCREASE IN AUTOMOTIVE VEHICLE CONTENT AVERAGE VEHICLE CONTENT GREAT WALL MERCEDES S-CLASS HAVAL H7 CONTENT: > CHF 60 CONTENT: > CHF 50 TESLA MODELS S & X BMW 7 SERIES 7.45 CONTENT: > CHF 70 CONTENT: > CHF 60 6.75 6.19 5.57 JAGUAR XF CHRYSLER PACIFICA 5.21 4.73 4.8

  28. Slide 28: Sika Innovations Drive Growth: Workability for Concrete

    SIKA INNOVATIONS DRIVE GROWTH E.G. INCREASED WORKABILITY FOR CONCRETE Sika® ViscoFlow® IN-HOUSE DEVELOPED HIGH-PERFORMANCE POLYMER PERMITS > 8 HOURS WORKABILITY OF CONCRETE + 30% SALES GROWTH IN 2016 Tons sold 40'000 20'000 0 2013 2014 2015 2016 MEETING THE ALLOWING CHALLENGES OF LONG CONSTRUCTION I

  29. Slide 29: 4) Accelerated Build-up of Emerging Markets

    4) ACCELERATED BUILD-UP OF EMERGING MARKETS

  30. Slide 30: Emerging Markets Build-up Since 2012

    EMERGING MARKETS BUILD-UP SINCE 2012 CAPTURING GROWTH POTENTIAL IN NEW MARKETS 52 11.0% 21 36% new average annual new of sales plants sales growth national in Emerging opened subsidiaries Markets 30

  31. Slide 31: Accelerated Build-up of Emerging Markets: Investments in Africa

    ACCELERATED BUILD-UP OF EMERGING MARKETS E.G. INVESTMENTS IN AFRICA 31

  32. Slide 32: 5) Acquisitions

    5) ACQUISITIONS ® BUILDING TRUST Ds

  33. Slide 33: Fragmentation Offers Acquisition Opportunities

    SIKA’S MARKET POTENTIAL FRAGMENTATION OFFERS ACQUISITION OPPORTUNITIES CONSTRUCTION CHEMICAL MARKET 2016 > CHF 60 BILLION Sika Top 10 companies with a combined market share of 40% Other 33

  34. Slide 34: Acquisitions Since 2012

    ACQUISITIONS SINCE 2012 GROWTH PLATFORMS FOR THE FUTURE In all In all 22 720 7 4 acquisitions million CHF Target regions additional Markets turnover 34

  35. Slide 35: Acquisitions: Improved Technology Know-how in the USA

    ACQUISITIONS E.G. IMPROVED TECHNOLOGY KNOW-HOW IN THE USA L.M. Scofield FRC Industries Rmax US market leader for Producer of high-quality Market leader in the concrete color additives synthetic polypropylene production of polyiso (ready‐mixed concrete) and fibers for concrete insulation products for

  36. Slide 36: 6) Values and Principles

    6) VALUES AND PRINCIPLES ® BUILDING TRUST Ds

  37. Slide 37: 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 37

  38. Slide 38: 7) Targets 2020

    7) TARGETS 2020 ® BUILDING TRUST Ds

  39. Slide 39: Strategic Targets 2020

    SIKA’S GROWTH MODEL WILL DELIVER STRATEGIC TARGETS 2020 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 39

  40. Slide 40: More Than CHF 1 Billion EBIT in 2020

    SIKA’S GROWTH MODEL WILL DELIVER MORE THAN CHF 1 BILLION EBIT IN 2020  Megatrends Urbanization, New Vehicle Design & Sustainability drive growth  Fragmented market of CHF 80 billion with huge growth opportunities  Sika is ideally positioned to profit from all phases of the construction life- cycl

  41. Slide 41: 3. Outlook

    3. OUTLOOK ® BUILDING TRUST Ds

  42. Slide 42: Confirmation of Outlook

    CONFIRMATION OF OUTLOOK SALES TO EXCEED CHF 6 BILLION IN 2017  6-8% sales growth in local currencies  Sales to exceed CHF 6 billion for the first time  Improvement in EBIT and net profit margins  Opening of 8 new plants  Foundation of 3 new national subsidiaries 42

  43. Slide 43: 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

  44. Slide 44: Thank You for Your Attention

    H y gs z Lam j oF j " [ie _ ’ =) | [S ie, WAL! =e a % \ F wee i = ii \ 4 nl - . : p = ite i " v ‘i 7 H fh oe : ‘ , i | =H = . F <. = 4 = . ore F } | ae p } | ~ . ‘ im x ’ id es THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST Bs

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