Slide 1: Record Sales and Profit, Growth in All Regions in the First Nine Months 2016
RECORD SALES AND PROFIT, GROWTH IN ALL REGIONS IN THE FIRST NINE MONTHS 2016 SIKA INVESTOR PRESENTATION OCTOBER 27, 2016
Slide 2: 1. Highlights and Results First Nine Months 2016
1. HIGHLIGHTS AND RESULTS FIRST NINE MONTHS 2016
Slide 3: Record Sales and Profit, Growth in All Regions in the First Nine Months 2016
RECORD SALES AND PROFIT, GROWTH IN ALL REGIONS IN THE FIRST NINE MONTHS 2016 Sales growth of 6.3% (5.8% in CHF) to a new record of CHF 4.33 billion Growth in all regions EBIT improved by 20.6% (+ CHF 101 million) and net profit rose by 22.9% posting new record values New quarterly record in
Slide 4: Key Figures Nine Months 2016
KEY FIGURES NINE MONTHS 2016 DISPROPORTIONATELY HIGH INCREASE IN PROFIT in CHF mn 2015 2016 Δ% Net sales 4,095.0 4,331.8 +5.8% Gross results as % of net sales 54.0 55.3 EBITDA 612.8 719.5 +17.4% EBIT 490.2 591.2 +20.6% Net profit 338.2 415.5 +22.9% Operating free cash flow 234.0 336.4 +43.8% ROCE in
Slide 5: Sales Nine Months 2016 Growth in All Regions
SALES NINE MONTHS 2016 GROWTH IN ALL REGIONS +5.3% +9.9% +3.8% +5.6% Growth (in LC) +0.1% +2.6% +2.3% -12.8% FX impact +1.5% +1.9% +0.7% +0.0% Acquisition Industry 21% 2,057 705 786 421 Construction 79% EMEA North Asia/Pacific Latin America America 5
Slide 6: Growth Momentum Continues Nine Months 2016
GROWTH MOMENTUM CONTINUES NINE MONTHS 2016 6.3% SALES GROWTH (5.8% IN CHF) + 9.9% + 5.3% + 3.8% 627 705 North America 740 786 + 5.6% 1,952 2,057 Asia/Pacific 453 421 EMEA Latin America 9M / 2015 9M / 2016 (in CHF million, growth in LC) 6
Slide 7: Sales Growth First Nine Months 2012 to 2016
SALES GROWTH FIRST NINE MONTHS 2012 TO 2016 STRONG ORGANIC GROWTH 16% 15.8% 14% 12% 7.2% 10% 8% 6.7% 6.3% in LC 5.5% 5.5% 2.0% 1.1% 6% acquisition 8.6% organic 4% 2.0% 4.0% 2% 4.7% 5.2% 3.5% 0% 1.5% 9M 2012 9M 2013 9M 2014 9M 2015 9M 2016 in CHF mn 9M 2012 9M 2013 9M 2014 9M 2015 9M 2016 Sales 9 3,6
Slide 8: EBIT Margin Development 2011 to 2016
EBIT MARGIN DEVELOPMENT 2011 TO 2016 19 CONSECUTIVE QUARTERS OF IMPROVEMENT PERIODIC EBIT MARGINS 16% 15% 2016 14% 13% 2015 2014 12% 11% 10% 2013 9% 8% 2012 7% 6% 2011 5% HY Q3 Q4 8
Slide 9: Five-Year Overview – Nine Months Figures
FIVE-YEAR OVERVIEW – NINE MONTHS FIGURES CONTINUOUSLY IMPROVING MARGINS 13.6% 9.6% EBIT IN CHF NET PROFIT IN CHF 500 10. 0% 700 14. 0% 12.0% +20.6% 450 9.0 % 8.3% 600 11.0% 12. 0% +22.9% In % of sales 591 10.2% 400 7.4% 416 8.0 % In % of sales 500 9.5% 10. 0% 6.7% 490 350 7.0 % 8.2% 6.1% 457 338 400
Slide 10: Key Investments: Continued Supply Chain Expansion
KEY INVESTMENTS IN THE FIRST NINE MONTHS 2016 CONTINUED SUPPLY CHAIN EXPANSION Opening of Sika plants: 2nd plant in Greece (Kryoneri, Athens, January 2016) 1st plant in Myanmar (Yangon, February 2016) 1st plant in Cambodia (Phnom Penh, February 2016) 4th plant in Canada (Vancouver, March 201
Slide 11: Key Investments: Expansion with Own National Subsidiaries
KEY INVESTMENTS IN THE FIRST NINE MONTHS 2016 EXPANSION WITH OWN NATIONAL SUBSIDIARIES New subsidiaries: Kuwait (March 2016) Nicaragua (June 2016) Cameroon (August 2016) Djibouti (August 2016) 11
Slide 12: Key Investments: Acquisitions as Growth Platform (L.M. Scofield)
KEY INVESTMENTS IN THE FIRST NINE MONTHS 2016 ACQUISITIONS AS GROWTH PLATFORM L.M. Scofield, USA US‐based market leader for concrete color additives (ready‐mixed concrete) and decorative treatments for refurbishment Buying new technology and spreading it out to Sika’s existing customer base Co
Slide 13: Key Investments: Acquisitions as Growth Platform (FRC Industries)
KEY INVESTMENTS IN THE FIRST NINE MONTHS 2016 ACQUISITIONS AS GROWTH PLATFORM FRC Industries, USA Producer of high-quality synthetic polypropylene fibers for concrete Strong growth trend for concrete fibers in the US, out-pacing overall construction growth Expansion of concrete additives portf
Slide 14: Good Start in Q4 2016 Key Initiatives Continue
GOOD START IN Q4 2016 KEY INITIATIVES CONTINUE Acquisition of Ronacrete (Far East) Ltd., Hong Kong Leading suppliers of repair mortars, tile adhesives and other mortar products in Hong Kong Strong specification business and a preferred partner for private and public key developers Extension of
Slide 15: Outlook: Confirmation of 2016 Annual Targets
OUTLOOK CONFIRMATION OF 2016 ANNUAL TARGETS Annual targets for 2016 can be confirmed Sales of around CHF 5.8 billion expected Disproportionately higher rise in margins with operating profit (EBIT) between CHF 780 and 800 million Opening of 8 to 10 new factories 4 new national subsidiaries
Slide 16: 2. Successful Strategy 2018 Execution
2. SUCCESSFUL STRATEGY 2018 EXECUTION
Slide 17: Five-Year Overview - Net Sales and EBIT
FIVE-YEAR OVERVIEW - NET SALES AND EBIT CONTINUATION OF PROFITABLE GROWTH STRATEGY 17
Slide 18: Strategy 2018: Sika's Growth Model Will Deliver
STRATEGY 2018 SIKA’S GROWTH MODEL WILL DELIVER MARKET PENETRATION 6 - 8% GROWTH PER YEAR 6 - 8 NEW PLANTS PER INNOVATION YEAR 100 NATIONAL SUBSIDIARIES BY 2018 EMERGING MARKETS 12 - 14% OPERATING PROFIT PER YEAR ACQUISITIONS > 8% OPERATING FREE CASH FLOW PER YEAR 25% RETURN ON CAPITAL EMPLOYED BY 20
Slide 19: Strategy 2018 – Achievements Since 2012
STRATEGY 2018 – ACHIEVEMENTS SINCE 2012 A PROVEN TRACK RECORD OF DELIVERY PILLARS OF THE GROWTH MODEL ACHIEVEMENTS • Successful Target Market concept MARKET PENETRATION • Megatrends driving growth • 333 new patents filed INNOVATION • 20 Global Technology Centers • 51 new plants opened EMERGING M
Slide 20: Market Penetration
MARKET PENETRATION FOCUS ON ATTRACTIVE MARKETS: CROSS-SELLING, LIFE-CYCLE MANAGEMENT, A STRONG BRAND Concrete Waterproofing Roofing Flooring & Coating Sealing & Bonding Refurbishment Industry 20
Slide 21: Megatrends Drive Our Growth
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
Slide 22: We Are Innovation
WE ARE INNOVATION STRONG TRACK RECORD 333 880 377 20 Patents were Employees are Invention Technology filed since dedicated to disclosures Centers 2012 Research and since 2012 world-wide Development 22
Slide 23: Emerging Markets Build-up Since 2012
EMERGING MARKETS BUILD-UP SINCE 2012 GROWTH POTENTIAL IN NEW MARKETS 51 12.5% 20 37% New Average sales New of turnover plants growth national in Emerging opened subsidiaries Markets 23
Slide 24: Acquisitions Since 2012
ACQUISITIONS SINCE 2012 GROWTH PLATFORMS FOR THE FUTURE In all In all 20 596 7 4 Acquisitions million CHF Target Regions turnover Markets 24
Slide 25: 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 25
Slide 26: 3. Two Examples of Strategy Execution in the Regions
3. TWO EXAMPLES OF STRATEGY EXECUTION IN THE REGIONS
Slide 27: Strong Strategy Execution in Africa
STRONG STRATEGY EXECUTION IN AFRICA +23% 9 sales growth in 9M 2016 new plants since 2012 18 subsidiaries 688 10 added employees since 2012 27
Slide 28: Major Construction Projects with Sika Products
MAJOR CONSTRUCTION PROJECTS WITH SIKA PRODUCTS Bridge over Maputo Bay, Mozambique Dangote fertilizer plant Lagos, Nigeria Luanda International Airport, Angola Mall of Egypt, Cairo, Egypt 28
Slide 29: Accelerated Build Up of Presence in USA
ACCELERATED BUILD UP OF PRESENCE IN USA 22 plants in USA and Canada 10 new plants added since 2012 Presence in residential Investment focus 10% market through Home Depot on fast growing sales growth (2,000 stores) and metro areas in 9M 2016 Lowes (1,800 stores) 29
Slide 30: Hudson Yards Project NYC
HUDSON YARDS PROJECT NYC SIKA IS HELPING TO BUILD A NEW CITY IN A CITY 30
Slide 31: 4. Saint-Gobain's Hostile Takeover Attempt
4. SAINT-GOBAIN’S HOSTILE TAKEOVER ATTEMPT
Slide 32: 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 3. No adequate representation of public shareholders on the Board 4. Saint-Gobain is a direct competitor of Sika 5. Sika loses A- credi
Slide 33: Sika Articles of Association Article 4: Restriction of Transferability
SIKA ARTICLES OF ASSOCIATION ARTICLE 4 RESTRICTION OF TRANSFERABILITY, THE 5% THRESHOLD “The Board of Directors reserves the right to refuse an acquirer of registered shares as shareholder, if the number of registered shares held by him exceeds 5% of the total number of registered shares entered in
Slide 34: 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
Slide 35: Thank You for Your Attention
THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST Bs