Sika Ag · SIX:SIKA

Sika — Investor Presentation (June 2015)

40 slides from Sika's investor presentation, June 2015

  1. Slide 1: Continuing Operating Speed, Successful Strategy Execution – Q1/2015 Update

    CONTINUING OPERATING SPEED, SUCCESSFUL STRATEGY EXECUTION – Q1/2015 UPDATE SIKA INVESTOR PRESENTATION, JUNE 2015

  2. Slide 2: 1. Record 2014, Successful Strategy Execution

    1. RECORD 2014, SUCCESSFUL STRATEGY EXECUTION

  3. Slide 3: Highlights 2014

    HIGHLIGHTS 2014  Record sales in all regions  13.0% sales growth (8.3% in CHF) to CHF 5.57 billion  Sales up 15.2% in emerging markets  Strong gross result at 53.0% (in 2013: 52.4%)  Above-average increase in EBIT +21.0%  Net profit growth 28.0%  8 new factories in Brazil, Mexico, Indonesia,

  4. Slide 4: Key Figures 2014 Record Results

    KEY FIGURES 2014 RECORD RESULTS In million CHF 2013 2014 Δ% Net sales 5,142.2 5,571.3 +8.3% Gross results as % of net sales 52.4 53.0 EBITDA 675.9 798.3 +18.1% EBIT 523.5 633.2 +21.0% Net profit 344.7 441.2 +28.0% Operating free cash flow 432.7 417.5 - 3.5% ROCE in % 21.0 23.3 4

  5. Slide 5: 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% + 12.9% 746 North America 1,040 + 15.9% 16.0% 2,734 EMEA Asia/Pacific 639 Latin America 2013 2014 (in million CHF, growth at constant FX) Growth of 15.2% in emerging markets 5

  6. Slide 6: Gross Result Development Continuous Improvement

    GROSS RESULT DEVELOPMENT CONTINUOUS IMPROVEMENT At year end 2010 2011 2012 2013 2014 53.9 % 50.5 % 52.2 % 52.4 % 53.0% 53.0 52.4 52.4 52.6 52.3 52.4 52.3 52.4 52.4 52.3 52.3 52.4 52.2 52.2 51.8 51.2 50.9 50.7 Gross result (trailing 12 months) 6

  7. Slide 7: Five-Year Overview Net Sales & EBIT in Local Currency

    FIVE-YEAR OVERVIEW NET SALES & EBIT IN LOCAL CURRENCY 12. 0% 11.4% SALES IN CHF 700 EBIT IN CHF 10.2% 650 9.9% +21.0% 10. 0% 9.0% 633 600 8.0 % 550 7.6% +21.0% +8.3% 524 6.0 % 5'571 500 +6.5% 450 +25.0% 5'142 4.0 % +5.8% 439 433 400 +3.2% 4'829 -21.0% 2.0 % 350 4'564 347 4'422 300 0.0 % 2010 2011 20

  8. Slide 8: 2. Highlights Q1/2015, Outlook – Continuing High Operating Speed

    2. HIGHLIGHTS Q1/2015, OUTLOOK – CONTINUING HIGH OPERATING SPEED

  9. Slide 9: Highlights Q1/2015

    HIGHLIGHTS Q1/2015  Q1 2015 growth of 5.1% despite exceptionally strong Q1/2014 (+23.3%)  Real CHF growth of -0.9% due to negative translation effects  All regions contributing to Q1 growth - North America, Latin America double digit  3 new production plants in UAE, Sri Lanka and La Réunion  Ne

  10. Slide 10: Continuation of Growth Momentum Despite High Base

    CONTINUATION OF GROWTH MOMENTUM DESPITE HIGH BASE FROM LAST YEAR (Q1 2014 +23.3%) Sales growth of 5.1% (-0.9% in CHF) to CHF 1,195.3 million +10.7% + 1.1% 136 158 +2.5% . North America + 17.0% 222 225 609 556 Asia/Pacific EMEA 139 151 Latin America 2014 2015 (in million CHF, growth at constant FX) 1

  11. Slide 11: Sales Growth by Quarter Dynamic Growth Momentum

    SALES GROWTH BY QUARTER DYNAMIC GROWTH MOMENTUM 28% 23.3% Growth rates in LC 23% acquisition 17.8% 9.2% organic 18% 14.0% 13% 10.6% 8.2% 11.7% 8.2% 7.4% 3.3% 5.4% 5.3% 1.2% 8% 14.1% 5.1% -0.2% 9.6% 1.4% 1.1% 3% 7.0% 7.3% 6.6% 6.3% 1.1% 3.9% 4.0% -2% -1.3% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4

  12. Slide 12: Q1 2015 Growth Drivers by Region

    Q1 2015 GROWTH DRIVERS BY REGION Growth + 1.1 % + 10.7 % + 2.5 % + 17.0 % (in LC) FX impact - 9.8 % 5.2 % - 1.2 % - 8.2 % Acquisition + 0.5 % + 0.4 % + 1.1 % + 5.0 % - 8.7 % 609 + 1.3 % 556 + 15.9 % + 8.8 % 222 225 136 158 139 151 2014 2015 EMEA North America Asia/Pacific LATAM (in million CHF, grow

  13. Slide 13: Investments and New Subsidiaries Q1/2015

    CONTINUING HIGH OPERATING SPEED INVESTMENTS AND NEW SUBSIDIARIES Q1/2015 Opening of Sika plants:  2nd plant in UAE (Dubai, March 2015)  1st plant on Reunion Island (March 2015)  1st plant in Sri Lanka (Ekala, March 2015) New subsidiary:  Myanmar (March 2015) UAE REUNION ISLAND 13

  14. Slide 14: Acquisitions Q1/2015

    CONTINUING HIGH OPERATING SPEED ACQUISITIONS Q1/2015 Company Country Target Market Duro-Moza Mozambique Refurbishment BMI USA Refurbishment, Flooring Axson Technologies Global Industry CTA Australia Refurbishment Total annual sales: CHF 108 million 14

  15. Slide 15: New Country Subsidiary in Myanmar

    CONTINUING HIGH OPERATING SPEED NEW COUNTRY SUBSIDIARY IN MYANMAR Sika in Myanmar SIKA TECHNICAL CENTER  Sales into Myanmar since 1992  Sika Technical Center opened in 2013  Own subsidiary opened in 2015 Projects supplied by Sika  Mandalay International Airport  Hanthawaddy International Airpor

  16. Slide 16: Outlook Business Development in the Current Year

    OUTLOOK BUSINESS DEVELOPMENT IN THE CURRENT YEAR  Sales growth expectations of 6-8% at constant exchange rates  Continued build-up of growth markets with 7-9 new factories and 3-5 acquisitions  Solid growth drivers in the Middle East and Africa  Europe expected to stagnate  USA with strong grow

  17. Slide 17: 2. Execution of Strategy 2018 – Innovation and Growth in Emerging Markets

    2. EXECUTION OF STRATEGY 2018 – INNOVATION AND GROWTH IN EMERGING MARKETS AS KEY DRIVERS

  18. Slide 18: Sika Is Active in Attractive Markets

    SIKA IS ACTIVE IN ATTRACTIVE MARKETS WITH CORE COMPETENCIES IN BONDING, SEALING, DAMPING, REINFORCING AND PROTECTING Concrete Waterproofing Roofing Flooring Sealing & Bonding Refurbishment Industry 18

  19. Slide 19: Mortar Is Sika's Fastest Growing Technology

    MORTAR IS SIKA’S FASTEST GROWING TECHNOLOGY CORE ELEMENT OF STRATEGY 2018 • 31% sales growth in 2014 • 20% of Sika`s group profit • 11 new factories in past 2 years • 7 acquisitions in past 2 years ►79 factories in 50 countries ►Sales target for 2015 is CHF 1 bn 19

  20. Slide 20: Strategy 2018: Sika's Growth Model Is Delivering

    STRATEGY 2018: SIKA’S GROWTH MODEL IS DELIVERING 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 20 |

  21. Slide 21: Innovation as a Key Driver – Refurbishment

    INNOVATION AS A KEY DRIVER – REFURBISHMENT NEW LEVEL OF SUSTAINABILITY IN TILE ADHESIVES SIKA’S NEW HIGH PERFORMANCE SikaCeram® TILE ADHESIVE COMBINES COST OFFERS A CONSIDERABLY LOWER EFFECTIVENESS WITH CONSUMPTION RATE ECO-EFFICIENCY SikaCeram®-290 StarLight FOR 80% HIGHER COVERAGE WITH SUSTAINABLE

  22. Slide 22: Innovation as a Key Driver – Concrete

    INNOVATION AS A KEY DRIVER – CONCRETE INCREASED WORKABILITY TIME A NEW SUBSTANCE THAT PERMITS THE TIME-DEPENDENT CONTROL OF CONCRETE CONSISTENCY > 8 HOURS WORKABILITY Sika® ViscoFlow® ADMIXTURE FOR CONTROLLABLE CONCRETE WORKABILITY TIMES MEETING THE CHALLENGES OF CONSTRUCTION IN URBAN ENVIRONMENTS A

  23. Slide 23: Innovation as a Key Driver – Automotive

    INNOVATION AS A KEY DRIVER – AUTOMOTIVE THE NEXT GENERATION IN VEHICLE BONDING LIGHTWEIGHT CONSTRUCTION AND MULTI-MATERIAL DESIGN ARE THE MEGATRENDS IN THE AUTOMOTIVE INDUSTRY SikaPower®ADHESIVES COMBINE HIGH STRENGTH AND ELASTICITY IDEAL FOR CONTEMPORARY AUTOMOTIVE MANUFACTURING ADHESIVE BONDING IS

  24. Slide 24: Growth in Emerging Markets Strong Growth Driver

    GROWTH IN EMERGING MARKETS STRONG GROWTH DRIVER DURING THE PAST YEARS  Average sales growth of 16.3% during the last 3 years  Again 10.5% growth in Q1/2015 in spite of a weak Chinese market  24 new plants during the last 3 years  16 new companies since 2012  Accelerated growth in Africa – strat

  25. Slide 25: Africa: A Continent on the Upswing

    AFRICA: A CONTINENT ON THE UPSWING

  26. Slide 26: Africa: The Second Biggest Continent in the World

    AFRICA THE SECOND BIGGEST CONTINENT IN THE WORLD  22% of the global land surface  15% of the world population (1.1 billion people)  54 countries  More than 2,000 languages  Climatic zones include: deserts, savannahs, stepps und rain forests 26

  27. Slide 27: Sika Has Increased the No. of Subsidiaries in Africa from 8 to 14

    SIKA HAS INCREASED THE NO. OF SUBSIDIARIES IN AFRICA FROM 8 TO 14 IN THE LAST THREE YEARS Tunisia Algeria Foundation years of Sika companies: Egypt  Algeria (1947)  Angola (2010)  Tunisia (1958)  Kenya (2013) Nigeria  Morocco (1979)  Ivory Coast (2014) Côte d’Ivoire  Mauritius (1981)  Nigeri

  28. Slide 28: Constant Expansion of Production Capacity in Africa

    CONSTANT EXPANSION OF PRODUCTION CAPACITY FROM 7 TO 14 FACTORIES IN THE LAST THREE YEARS Number of factories and employees Sika factories opened in the last three years Tunisia  Algeria: 1 factory, 108 employees  Tunisia: 1 factory, 60 employees Algeria Egypt  Morocco: 1 factory, 94 employees  M

  29. Slide 29: Sika in Africa: Investing in the Future

    SIKA IN AFRICA INVESTING IN THE FUTURE  Employees: Around 620 employees: all country head positions were filled from inside the company  Knowledge as a valuable asset: Sika trains people and provides continuous training  Social responsibility: Includes projects in Egypt, Morocco, South Africa, Ta

  30. Slide 30: Angola Major Project: Lauca Dam

    ANGOLA MAJOR PROJECT: LAUCA DAM  Biggest hydroelectric facility in Angola, completion in 2017  132m high and 1,100m long  Total cost: USD 4 billion  Contractor: Odebrecht (Brazil)  Sika supplying mortar, concrete admixtures, sealants and coatings 30

  31. Slide 31: Angola Major Project: Luanda International Airport

    ANGOLA MAJOR PROJECT: LUANDA INTERNATIONAL AIRPORT  Biggest airport in the country  Total cost: Approximately USD 4 billion  Contractor: China International Fund Limited (CIF)  Sika supplying mortar, concrete admixtures, sealants and coatings 31

  32. Slide 32: Mozambique Major Project: Catembe Bridge

    MOZAMBIQUE MAJOR PROJECT: CATEMBE BRIDGE  Bridge over Maputo Bay  680m long and 137m high  Total cost: USD 725 million  85% financed by the Export-Import Bank of China  Sika supplying mortar, concrete admixtures, sealants and coatings 32

  33. Slide 33: Mozambique Major Project: Gas Production in Rovuma

    MOZAMBIQUE MAJOR PROJECT: GAS PRODUCTION IN ROVUMA  Biggest gas production project worldwide  Cabo Delgado, in the Rovuma Basin  Total cost: USD 30 billion  Sika supplying mortar, concrete admixtures, sealants and coatings 33

  34. Slide 34: Africa Strategy Priorities

    AFRICA STRATEGY PRIORITIES  Africa strategy on track for success + 18% sales increase in first quarter of 2015  Further subsidiaries and factories planned  Market leadership Doubling of sales within the next five years  Knowledge transfer Development and advancement of local employees  Social r

  35. Slide 35: 2. Saint-Gobain's Hostile Takeover Attempt

    2. SAINT-GOBAIN’S HOSTILE TAKEOVER ATTEMPT

  36. Slide 36: 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 – but value of synergies is lower than premium paid 3. No adequate representation of public shareholders on the Board 4. Saint-Gobain i

  37. Slide 37: Ongoing Court Proceedings

    ONGOING COURT PROCEEDINGS 1. SWH requests to maintain voting rights: The request was denied by Kantonsgericht Zug, decision was appealed against to Supreme Court of Zug 2. SWH appeals decisions of April 14, 2015 AGM, for which voting right limitation was applied 3. Cascade Investment/Bill and Melind

  38. Slide 38: Significant and Continued Shareholder Value Creation

    SIGNIFICANT AND CONTINUED SHAREHOLDER VALUE CREATION in local currencies 4,000 Sika SMI (rebased to Sika) SGO (rebased to Sika) 89.5% 3,000 43.1% 2,000 (3.3%) 1,000 2011 2012 2013 2014(1) CHF5.1bn in Value creation(2) total Shareholder in CHFbn 2.8 Shareholder 2.0(1) Value Creation 0.9 since 2011 (0

  39. Slide 39: 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

  40. Slide 40: Thank You for Your Attention

    THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST Bs

Sika — Investor Presentation (June 2015) on 6ix