Sika Ag · SIX:SIKA

Sika — Investor Presentation (April 2017)

43 slides from Sika's investor presentation, April 2017

  1. Slide 1: Strong Start to the Year: 10.7% Sales Growth in First Quarter 2017

    STRONG START TO THE YEAR 10.7% SALES GROWTH IN FIRST QUARTER 2017 SIKA INVESTOR PRESENTATION APRIL 2017

  2. Slide 2: Record Results in 2016

    RECORD RESULTS IN 2016 ® BUILDING TRUST Bs

  3. Slide 3: Highlights 2016

    HIGHLIGHTS 2016 1. Record results  +5.5% sales growth in local currencies to CHF 5,747.7 million  CHF 795.3 million EBIT (+18.1%)  CHF 566.6 million net profit (+21.8%)  CHF 586.5 million operating free cash flow (+29.9%)  28.7% ROCE (2015: 24.3%) 2. Key investments  4 new national subsidiarie

  4. Slide 4: Key Figures: Record Results

    KEY FIGURES RECORD RESULTS in CHF mn 2015 2016 Δ% Net sales 5,489.2 5,747.7 + 4.7% EBIT 673.3 795.3 + 18.1% Net profit 465.1 566.6 + 21.8% Operating free cash flow 451.5 586.5 + 29.9% ROCE 24.3% 28.7% Net cash 94.0 415.6 4

  5. Slide 5: 2016 – Growth in All Regions

    2016 – GROWTH IN ALL REGIONS 5.5% SALES GROWTH (4.7% IN CHF) + 4.6% + 3.6% +7.8% 923 North America 1,081 +5.1% 2,695 Asia/Pacific EMEA 564 Latin America 2015 2016 (in CHF mn, growth in LC) Growth of 6.7% in Emerging Markets 5

  6. Slide 6: Key Investments in 2016: Continued Supply Chain Expansion

    KEY INVESTMENTS IN 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 2016)  2nd plant in Thai

  7. Slide 7: Key Investments in 2016: Expansion with Own National Subsidiaries

    KEY INVESTMENTS IN 2016 EXPANSION WITH OWN NATIONAL SUBSIDIARIES New subsidiaries:  Kuwait (March 2016)  Nicaragua (June 2016)  Cameroon (August 2016)  Djibouti (August 2016) Now present in 97 countries with own national subsidiaries 7

  8. Slide 8: Five-Year Overview: Continuation of Profitable Growth Strategy

    FIVE-YEAR OVERVIEW CONTINUATION OF PROFITABLE GROWTH STRATEGY 8

  9. Slide 9: First Quarter 2017 and Outlook

    FIRST QUARTER 2017 AND OUTLOOK

  10. Slide 10: Results First Quarter: Strong Start to the Year

    RESULTS FIRST QUARTER STRONG START TO THE YEAR  + 10.7% sales growth in local currencies, + 9.0% in CHF  Growth in all regions  Opening of 5th plant in Mexico  Acquisition of Bitbau Dörr in Austria  Pressure on margins from raw materials, counteractions initiated 10

  11. Slide 11: 10.7% Sales Growth in the First Quarter

    STRONG START TO THE YEAR 10.7% SALES GROWTH IN THE FIRST QUARTER + 10.7% 12% 10% + 8.3% 2.2% 8% + 7.0% 2.9% 0.5% 6% + 4.0% acquisition 4% 0.4% + 3.4% 8.5% organic 6.5% 0.4% 5.4% 3.6% 2% 3.0% 0% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 11

  12. Slide 12: Confirmation of Outlook for 2017

    CONFIRMATION OF OUTLOOK FOR 2017 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 margins  Opening of 8 new plants  Foundation of 3 new national subsidiaries 12

  13. Slide 13: Growth Strategy – Targets Raised

    GROWTH STRATEGY – TARGETS RAISED

  14. Slide 14: Strategy Review: Confirmation of Growth Model and Raised Targets 2020

    STRATEGY REVIEW: CONFIRMATION OF SIKA’S GROWTH MODEL AND RAISED TARGETS 2020 1) Performance and investments ahead of STRATEGY 2018 2) Market Penetration 3) Innovation 4) Accelerated build-up of Emerging Markets 5) Acquisitions 6) Values 7) Raised targets 2020 14

  15. Slide 15: 1) Performance and Investments Ahead of Strategy 2018

    1) PERFORMANCE AND INVESTMENTS AHEAD OF STRATEGY 2018

  16. Slide 16: Growth Model Delivers: 20 Consecutive Quarters of Margin Improvement

    SIKA’S GROWTH MODEL DELIVERS - 20 CONSECUTIVE QUARTERS OF MARGIN IMPROVEMENT PERIODIC EBIT MARGINS 16% 15% 14% 2016 13% 2015 2014 12% 11% 10% 2013 9% 8% 2012 7% 6% 2011 5% HY Q3 Q4 16

  17. Slide 17: Growth Model Delivers Performance Two Years Ahead of Targets

    SIKA’S GROWTH MODEL DELIVERS PERFORMANCE TWO YEARS AHEAD OF TARGETS 2012 2013 2014 2015 2016 Targets 2018 Net sales growth in local currencies 5.3% 9.4% 13.0% 6.2% 5.5% 6-8% EBIT as % net sales 9.0% 10.2% 11.4% 12.3% 13.8% 12-14% OpFCF as % net sales 6.3% 8.4% 7.5% 8.2% 10.2% >8% ROCE in % (EBIT bas

  18. Slide 18: Growth Model Delivers: Key Investments Since 2012

    SIKA’S GROWTH MODEL DELIVERS KEY INVESTMENTS SINCE 2012 PILLARS OF THE GROWTH MODEL ACHIEVEMENTS • Successful Target Market concept MARKET PENETRATION  • Megatrends driving growth • 370 new patents filed INNOVATION  • 20 Global Technology Centers • 51 new plants opened EMERGING MARKETS  • 20 new

  19. Slide 19: Global Strategy Review Performed: Bottom-Up Review

    GLOBAL STRATEGY REVIEW PERFORMED BOTTOM-UP REVIEW Considering the strong performance ahead of targets, a comprehensive review of the strategy was performed:  A bottom-up review of STRATEGY 2018 with Senior Managers worldwide carried out throughout the second half of 2016  Excellency of STRATEGY 20

  20. Slide 20: 2) Market Penetration

    2) MARKET PENETRATION ® BUILDING TRUST Bs

  21. 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 for

  22. Slide 22: Sika's Market Potential: Large and Growing Market Segments

    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- WATER- FLOORING FLOORING PROOFING PROOFING ROOFING SEALING & BONDING ROOFING SEALING & BONDING REFURBISHMENT REFURBISHMENT 22

  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: From New Build to Refurbishment

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

  25. Slide 25: 3) Innovation

    3) INNOVATION ® BUILDING TRUST Bs

  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: Increase in Automotive Vehicle Content

    SIKA INNOVATIONS DRIVE GROWTH E.G. INCREASE IN AUTOMOTIVE VEHICLE CONTENT AVERAGE VEHICLE CONTENT GREAT WALL HAVAL H7 CONTENT: > CHF 50 TESLA MODELS S & X BMW 7 SERIES CONTENT: > CHF 70 CONTENT: > CHF 60 7.45 6.75 6.19 JAGUAR XF CHRYSLER PACIFICA 5.21 5.57 CONTENT: > CHF 100 CONTENT: > CHF 40 4.73 4

  28. Slide 28: Sika Innovations Drive Growth: Increased 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 CHALLENGES OF CONSTRUCTION IN URBAN ENVIR

  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 51 11.0% 20 36% new average sales new of sales plants 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 Bs

  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: Growth Platforms for the Future

    ACQUISITIONS SINCE 2012 GROWTH PLATFORMS FOR THE FUTURE More than More than In all In all 20 670 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 Producer of high- Market leader in for concrete color quality synthetic the production of additives polypropylene polyiso insulation (ready‐mixed fibers for concrete products for concrete) an

  36. Slide 36: 6) Values and Principles

    6) VALUES AND PRINCIPLES ® BUILDING TRUST Bs

  37. Slide 37: Sika's Values and Principles: Strong Corporate Culture

    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) Raised Targets 2020

    7) RAISED TARGETS 2020 ® BUILDING TRUST Bs

  39. Slide 39: Growth Strategy: New and Raised Targets 2020

    GROWTH STRATEGY NEW AND RAISED TARGETS 2020 STRATEGY 2018 NEW TARGETS 2020 6 - 8% ANNUAL GROWTH 6 - 8% ANNUAL GROWTH 6 - 8 NEW PLANTS PER 30 NEW PLANTS YEAR 100 NATIONAL 105 NATIONAL SUBSIDIARIES BY 2018 SUBSIDIARIES 12 - 14% EBIT MARGIN 14 - 16% EBIT MARGIN PER YEAR PER YEAR > 8% OPERATING FREE > 1

  40. Slide 40: Growth Model Will Deliver Strategic Targets 2020

    SIKA’S GROWTH MODEL WILL DELIVER STRATEGIC TARGETS 2020 MARKET PENETRATION 6 - 8% ANNUAL GROWTH INNOVATION 30 NEW PLANTS 105 NATIONAL SUBSIDIARIES EMERGING MARKETS 14 - 16% EBIT MARGIN PER YEAR ACQUISITIONS > 10% OPERATING FREE CASH FLOW PER YEAR > 25% ROCE PER YEAR VALUES 40

  41. Slide 41: Growth Model Will Deliver More Than CHF 1 Billion EBIT in 2020

    SIKA’S GROWTH MODEL WILL DELIVER MORE THAN CHF 1 BILLION EBIT IN 2020  Sika’s GROWTH MODEL delivers: Performance two years ahead of targets  Megatrends Urbanization, New Vehicle Design and Sustainability drive growth  Fragmented market of CHF 80 billion with huge growth opportunities  Sika is id

  42. Slide 42: 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

  43. Slide 43: Thank You for Your Attention

    THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST By

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