Slide 1: Resilient Strategy Continues to Deliver – Sika Investor Presentation April 2021
RESILIENT STRATEGY CONTINUES TO DELIVER DYNAMIC GROWTH – RECORD SALES IN FIRST QUARTER 2021 SIKA INVESTOR PRESENTATION APRIL 2021
Slide 2: 1. First Quarter 2021
1. FIRST QUARTER 2021 ® BUILDING TRUST By
Slide 3: Highlights Q1 2021: Dynamic Growth – Record Sales in First Quarter
HIGHLIGHTS Q1 2021 DYNAMIC GROWTH – RECORD SALES IN FIRST QUARTER 1. Strong start to the year with dynamic growth in Q1 2021 ▪ Sales up by 12.6% in local currencies ▪ + 10.2% in CHF to CHF 1,998.6 million ▪ Growth in all regions 2. Key investments ▪ Acquisition of three companies ▪ Kreps (Russia) ▪
Slide 4: Dynamic Growth in First Quarter of 2021
DYNAMIC GROWTH IN FIRST QUARTER OF 2021 12.6% INCREASE IN SALES IN LOCAL CURRENCIES (10.2% IN CHF) + 12.6% + 13.2% + 25.8% + 6.2% 2.00 Group + 2.7% 0.42 0.48 Asia/Pacific Americas 0.91 0.18 EMEA 3M Global Business 12M2020 2017 3M 2021 (in CHF billion, growth in LC) 4
Slide 5: 2. 2020 Business Year
2. 2020 BUSINESS YEAR ® BUILDING TRUST By
Slide 6: Financial Highlights 2020: Record Results for Profit and Cash Flow
FINANCIAL HIGHLIGHTS 2020 RECORD RESULTS FOR PROFIT AND CASH FLOW ▪ Record results ▪ Sales growth of 3.4% in local currencies ▪ CHF 1,130.5 million EBIT (+7.1%) ▪ EBIT margin improved from 13.0% to 14.4% ▪ CHF 825.1 million net profit (+8.8%) ▪ CHF 1,259.4 million operating free cash flow (+22.7%) ▪
Slide 7: ESG Highlights 2020: Reduction of CO2 Emissions by 25.9%
ESG HIGHLIGHTS 2020 REDUCTION OF CO2 EMMISSIONS BY 25.9% -12.1% -21.2% waste energy consumption per ton sold per ton sold -25.9% 10.1 CO2 emissions per ton sold hours of training (20kg, previous year: 27kg) per employee 7
Slide 8: Key Figures: Record Profitability
KEY FIGURES RECORD PROFITABILITY in CHF mn 2019 2020 Δ% Net sales 8,109.2 7,877.5 - 2.9 Gross margin 53.6% 54.8% EBITDA 1,387.6 1,497.6 + 7.9 EBIT 1,055.1 1,130.5 + 7.1 Net profit 758.5 825.1 + 8.8 Operating free cash flow 1,026.1 1,259.4 + 22.7 8
Slide 9: Local Currency Growth in All Regions
LOCAL CURRENCY GROWTH IN ALL REGIONS + 3.4% 3.4% SALES GROWTH (-2.9% IN CHF) IN 2020 + 4.4% + 12.6% 7,877.5 + 1.0% Group - 11.4% 1,696 1,996 3,410 Asia/Pacific Americas 776 EMEA Global Business 2019 2020 (in CHF million, growth in LC) 9
Slide 10: Gaining Further Market Share: Investments in Six Plants and One Acquisition
GAINING FURTHER MARKET SHARE INVESTMENTS IN SIX PLANTS AND ONE ACQUISITION Investment in polyurethane Admixtures, Mortars, and Acrylic Plant production facilities Barranquilla, Colombia Düdingen, Switzerland Modern Waterproofing Group, Egypt Waterproofing Adeplast, Romania (Closing) Mortar plant Bui
Slide 11: Sika's Success Factors in the Pandemic
SIKA’S SUCCESS FACTORS IN THE PANDEMIC
Slide 12: Highly Resilient Distribution Business
SIKA’S SUCCESS FACTORS IN THE PANDEMIC HIGHLY RESILIENT DISTRIBUTION BUSINESS ▪ Booming home improvement ▪ Sika establishes itself as household brand ▪ Tailor-made solutions and customer focus for every distribution channel ▪ Gaining further market share in online sales and e-commerce double-digit 4
Slide 13: High Resilience of Refurbishment
SIKA’S SUCCESS FACTORS IN THE PANDEMIC HIGH RESILIENCE OF REFURBISHMENT ▪ Structures have to be maintained and projects do not tolerate delay for security reasons ▪ New regulations and building standards make refurbishment mandatory ▪ Complexity favor refurbishment over new build ▪ Sika with strong
Slide 14: Huge Investments in Digitalization
SIKA’S SUCCESS FACTORS IN THE PANDEMIC HUGE INVESTMENTS IN DIGITALIZATION ▪ COVID-19 has accelerated digital and Sika offers solutions from basement to roof, like e-commerce boom waterproofing, fire protection, protection against electrostatic charge, or cool roofs ▪ Many new data centers as backbon
Slide 15: Strong Customer Focus
SIKA’S SUCCESS FACTORS IN THE PANDEMIC STRONG CUSTOMER FOCUS ▪ Decentralized organisations can quickly adapt to local situation ▪ Strong, locally managed teams ▪ Close to projects and close to customers ▪ Already close contact with customers was further intensified during pandemic ▪ Daily calls and
Slide 16: Sika Clearly Outperforms Competitors
SIKA’S SUCCESS FACTORS IN THE PANDEMIC SIKA CLEARLY OUTPERFORMS COMPETITORS 2018 2019 2020 +16.3% +13.6% +10.7% +3.4% -2.1% -5.1% Sika Peers Sika Peers Sika Peers Notes: Growth in constant currencies 16
Slide 17: Financial Results 2020
FINANCIAL RESULTS 2020 ® BUILDING TRUST By
Slide 18: Sales 2020: 3.4% Growth in Local Currencies
SALES 2020 3.4% GROWTH IN LOCAL CURRENCIES in CHF mn 2019 2020 Net sales 8,109.2 7,877.5 -6.3% 7.2% Organic growth -310.5 -3.8% Acquisition effect +580.6 8,109 7,878 Currency effect -501.8 2019 Org. Acq. FX 2020 18
Slide 19: Sales Development 2018 to 2020
SALES DEVELOPMENT 2018 TO 2020 3.4% GROWTH IN LOCAL CURRENCIES IN 2020 16.3% 13.6% 16% 11% 6.8% 13.0% 3.4% 6% in LC 7.2% 6.8% acquisition 1% 3.3% organic -3.8% -4% 2018 2019 2020 12M 2018 12M 2019 12M 2020 in CHF mn Sales 7,085.4 8,109.2 7,877.5 In 2020, sales growth of acquired businesses since ini
Slide 20: EBIT Improvement 2020: Strategic Levers Driving Improvement
EBIT IMPROVEMENT 2020 STRATEGIC LEVERS DRIVING IMPROVEMENT +0.5% -0.7% +0.4% +1.2% 14.4% 13.0% EBIT % 2019 Material Margin Operational M&A Dilution / M&A Synergies EBIT % 2020 Improvements Efficiency (cost) Other 20
Slide 21: Operating Free Cash Flow Development: Strong Cash Conversion
OPERATING FREE CASH FLOW DEVELOPMENT STRONG CASH CONVERSION Operating Free Cash Flow 12.7% 16.0% ▪ 2020 operating free cash flow at 16.0% of sales 10.2% 8.0% 7.2% ▪ Higher profitability and lower 1,259.4 CapEx 1,026.1 586.5 496.8 513.2 ▪ NWC reduction of CHF 124 2016 2017 2018 2019 2020 million (vs.
Slide 22: Net Debt/EBITDA Development: Strong Deleveraging Profile
NET DEBT/EBITDA DEVELOPMENT (AS REPORTED) STRONG DELEVERAGING PROFILE ▪ De-leveraging well on track 3.4 ▪ Strong cash conversion in 2.3 2.5 2019/2020 led to significant 1.8 1.9 leverage reduction from peak in 2019 (3.4x in June 2019) ▪ Net debt decreased by CHF 550 million in 2020 Q1 Q2 Q3 Q4 Q1 Q2
Slide 23: 3. Resilient Growth Strategy 2023
3. RESILIENT GROWTH STRATEGY 2023
Slide 24: Major Megatrends Supporting Growth
RESILIENT STRATEGY – MAJOR MEGATRENDS SUPPORTING GROWTH FURTHER ACCELERATION DESPITE PANDEMIC Technological Climate Change and Urbanization Progress Scarcity of Resources Demographic Dynamic Change Economy 24
Slide 25: Resilient Growth Strategy 2023: Strategic Targets Confirmed
RESILIENT GROWTH STRATEGY 2023 STRATEGIC TARGETS CONFIRMED DESPITE PANDEMIC SUSTAINABILITY Market Penetration 6-8% annual growth 15-18% EBIT margin Until 2020: <15% Innovation Operational Efficiency 25% of sales with new >10% products Operating free cash flow per year as % of net sales Acquisitions
Slide 26: Accelerated Automation in the Building Industry
RESILIENT GROWTH STRATEGY ACCELERATED AUTOMATION IN THE BUILDING INDUSTRY ▪ Increasing demand for shorter Singapore is forerunner in modular building. In construction time and shortage of order to accelerate industrialization of qualified labor favors modular construction, authorities explicitly req
Slide 27: Unlocking Additional Potential in Suburbia
RESILIENT GROWTH STRATEGY UNLOCKING ADDITIONAL POTENTIAL IN SUBURBIA ▪ Urbanization trend to continue ▪ Big cities remain highly attractive, suburban centers are becoming more important in developed industrialized countries ▪ Need for housing and infrastructure facilities to increase in megacities a
Slide 28: CHF 10 Trillion Planned Stimuli for Construction
RESILIENT GROWTH STRATEGY CHF 10 TRILLION PLANNED STIMULI FOR CONSTRUCTION ▪ Extensive infrastructure programs stimulate economies around the globe Americas stimulus programs CHF 1 trillion ▪ Thanks to its expertise and product portfolio EMEA stimulus programs for new construction, refurbishment, an
Slide 29: 4. Sika as Enabler
4. SIKA AS ENABLER ® BUILDING TRUST By
Slide 30: Sika as Enabler for a Sustainable Future
SIKA AS ENABLER FOR A SUSTAINABLE FUTURE Construction Automotive 40% of global CO2 emissions Road traffic responsible for attributable to construction fifth of global greenhouse and building sector gases Huge opportunity as potential for progress is immense Sika offers the solutions and has the inno
Slide 31: Saving Resources with Innovative Roofing Solutions
SIKA AS ENABLER SAVING RESOURCES WITH INNOVATIVE ROOFING SOLUTIONS ▪ Sika Sarnafil® AT is first Cradle to Cradle CertifiedTM Membrane worldwide ▪ Recycling of roof membranes saves resources and reduces burden on climate ▪ Used roof membranes are retrieved and processed into granular material. Recycl
Slide 32: Clean Water for Millions of People
SIKA AS ENABLER CLEAN WATER FOR MILLIONS OF PEOPLE ▪ Demand for drinking water and wastewater treatment facilities is increasing rapidly ▪ Sika has innovative solutions to prevent leaks and protect water quality in these facilities – for new construction and maintenance ▪ Sika waterproofing systems
Slide 33: reCO2ver – Concrete Recycling
SIKA AS ENABLER reCO2ver – CONCRETE RECYCLING Sika’s new patented recycling process for old concrete Sika’s new recycling process for old Sika Additive concrete separates Demolished Concrete the components completely Sand They can be re-used for new high-grade Limestone concrete + stored CO2 This fu
Slide 34: Heat Loss Reduction by 35%
SIKA AS ENABLER HEAT LOSS REDUCTION BY 35% Examples of Sika applications and products for sustainable buildings Where heat escapes 26% Roofs Roofing systems 33% Walls Facades 21% Windows & Doors 8% Floor Windows & Doors Flooring 12% Ventilation Interior Finishing 35% Waterproofing of heat loss reduc
Slide 35: Community Engagement: Strong Global Engagement During the Pandemic
COMMUNITY ENGAGEMENT STRONG GLOBAL ENGAGEMENT DURING THE PANDEMIC Education Infrastructure Water and climate Library Project, China Kovive Child welfare Zona Cero, Chile Rebuilding together, USA ▪ 6th year organization, Switzerland ▪ Involvement in the project ▪ For over 10 years ▪ Donation of over
Slide 36: 5. Outlook
5. OUTLOOK ® BUILDING TRUST By
Slide 37: Annual Target Raised for Fiscal Year 2021
ANNUAL TARGET RAISED FOR FISCAL YEAR 2021 CONTINUATION OF SUCCESSFUL GROWTH STRATEGY ▪ Outlook for 2021 fiscal year ▪ Double-digit sales growth in local currencies (to date: sales increase of 6%-8% in local currencies) ▪ Over-proportional increase in EBIT, EBIT margin to reach 15% for the first time
Slide 38: Thank You for Your Attention
THANK YOU FOR YOUR ATTENTION
Slide 39: 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