Sika Ag · SIX:SIKA

Sika — H1 2014 Earnings Presentation

34 slides from Sika's earnings presentation, July 2014

  1. Slide 1: Half-Year Results 2014 and Strategy 2018

    HALF-YEAR RESULTS 2014 AND STRATEGY 2018 SIKA PRESENTATION JULY 2014

  2. Slide 2: 1. Highlights and Results Half-Year 2014

    1. HIGHLIGHTS AND RESULTS HALF-YEAR 2014

  3. Slide 3: Highlights Half-Year 2014

    HIGHLIGHTS HALF-YEAR 2014  Strategy 2018 well on track  18.1% sales growth (10.6% in CHF) to CHF 2,656.9 million  High growth dynamic in all regions  Sales up 18.1% in emerging markets  25.7% increase in net profit to CHF 177.6 million  3 new factories in Brazil, Indonesia, and India  3 acqui

  4. Slide 4: Key Figures Half-Year 2014

    KEY FIGURES HALF-YEAR 2014 HIGH SALES GROWTH – ABOVE-AVERAGE INCREASE IN PROFIT in CHF mn 2013 2014 Δ% Net sales 2,402.5 2,656.9 +10.6% Gross results as % of net sales 53.2 53.3 EBITDA 293.4 347.7 +18.5% EBIT 220.2 266.4 +21.0% Net profit 141.3 177.6 +25.7% Operating free cash flow 15.3 36.6 ROCE in

  5. Slide 5: Growth Momentum Continues Half-Year 2014

    GROWTH MOMENTUM CONTINUES HALF-YEAR 2014 18.1% SALES GROWTH (10.6% IN CHF) + 21.7% , + 6.5% +18.1% 335 North America + 16.8% 485 1,336 Asia/Pacific EMEA 296 Latin America HY 1 / 2013 HY 1 / 2014 (in CHF mn, growth at constant exchange rates) Growth of 18.1% in Emerging Markets 5

  6. Slide 6: Accelerated Build-up of Emerging Markets

    ACCELERATED BUILD-UP OF EMERGING MARKETS INVESTMENTS IN HALF-YEAR 2014 Opening of Sika plant:  7th plant in Brazil (Aparecida de Goiânia, January 2014)  2nd plant in Indonesia (Surabaya, May 2014)  6th plant in India (Jhagadia, June 2014) India Brazil 6

  7. Slide 7: Leading Role in Market Consolidation

    LEADING ROLE IN MARKET CONSOLIDATION ACQUISITIONS HALF-YEAR 2014 Company Country Target Market Klebag Chemie AG Switzerland Sealing & Bonding, Flooring Company for flooring and coating South Korea Flooring products Lwart Química Ltda. Brazil Waterproofing, Roofing Total sales: CHF 53 million 7

  8. Slide 8: 2. Performance Half-Year 2014

    2. PERFORMANCE HALF-YEAR 2014

  9. Slide 9: Profit & Loss Half-Year 2014

    PROFIT & LOSS HALF-YEAR 2014 STRONG IMPROVEMENT OF KEY FINANCIALS in CHF mn 2013 NS 2014 NS Growth Net sales 2,402.5 100 % 2,656.9 100 % + 10.6% Gross results 1,277.4 53.2 % 1,417.4 53.3 % + 11.0% Personnel cost -523.4 -21.8 % -550.6 -20.7 % + 5.2% Other OPEX -460.6 -19.2 % -519.1 -19.5 % + 12.7% De

  10. Slide 10: Sales Half-Year 2014: Negative Currency Impact

    SALES HALF-YEAR 2014 NEGATIVE CURRENCY IMPACT OF 7.5% in CHF mn 2013 2014 Δ % Net sales 2,402.5 2,656.9 + 254.4 +10.6 Organic growth + 237.5 +9.9 Acquisition effect + 197.0 +8.2 Currency effect - 180.1 -7.5 10

  11. Slide 11: Sales Growth by Quarter

    SALES GROWTH BY QUARTER CONTINUED GROWTH MOMENTUM 23.3% 17.8% 9.2% Net sales 12 month rolling 14.0% 10.6% 9.6% 8.2% 7.4% at constant FX 3.3% 14.1% 1.2% acquisition organic 8.2% 7.0% 7.3% 6.6% -0.2% +1.1% -1.3% in CHF mn Q1 PY Q2 PY Q3 PY Q4 PY Q1 CY Q2 CY Quarterly 1,043.1 1,359.4 1,405.2 1,334.5 1,

  12. Slide 12: Sales Half-Year 2014: Growth in All Regions

    SALES HALF-YEAR 2014 GROWTH IN ALL REGIONS + 21.7 % + 6.5 % + 18.1 % + 16.8 % Growth (at constant FX) - 3.3 % - 6.5 % - 11.6 % - 19.2 % FX impact + 14.7 % + 0.0 % + 4.0 % + 4.1 % Acquisition 20% 80% Construction Industry 1,336 355 485 296 EMEA North Asia/Pacific Latin America America 12

  13. Slide 13: Gross Result Development

    GROSS RESULT DEVELOPMENT STABLE GROSS RESULT 2009 2010 2011 2012 2013 2014 Jun (YTD) 55.1 % 53.9 % 50.5 % 52.2 % 52.4 % 53.3 % Gross result (trailing 12 months) 13

  14. Slide 14: Consolidated Balance Sheet June 2014

    CONSOLIDATED BALANCE SHEET JUNE 2014 in CHF mn 31.12.2013 30.06.2014 Δ Cash and cash equivalents 1,028.3 526.8 - 501.5 Other current assets 1,559.6 1,862.3 + 302.7 Current assets 2,587.9 2,389.1 - 198.8 Non-current assets 2,144.1 2,194.3 + 50.2 Total assets 4,732.0 4,583.4 - 148.6 Current liabilitie

  15. Slide 15: Five-Year Overview: Net Sales

    FIVE-YEAR OVERVIEW (HALF-YEAR FIGURES) NET SALES + 10.6% in CHF mn 2'657 2'403 2'311 2'235 2'094 2010 2011 2012 2013 2014 15

  16. Slide 16: Five-Year Overview: EBIT

    FIVE-YEAR OVERVIEW (HALF-YEAR FIGURES) EBIT in CHF mn + 21.0% 266 217 220 198 178 2010 2011 2012 2013 2014 16

  17. Slide 17: Five-Year Overview: Net Profit

    FIVE YEAR OVERVIEW (HALF-YEAR FIGURES) NET PROFIT in CHF mn + 25.7% 178 151 141 125 114 2010 2011 2012 2013 2014 17

  18. Slide 18: 3. Strategy 2018

    3. STRATEGY 2018 ® BUILDING TRUST Bs

  19. Slide 19: Attractive Industry and Markets

    ATTRACTIVE INDUSTRY AND MARKETS 19

  20. Slide 20: Attractive Industry and Markets: Significant Growth Potential

    ATTRACTIVE INDUSTRY AND MARKETS SIGNIFICANT GROWTH POTENTIAL Market Volume 2013 Market Volume 2018* CHF 60 billion > CHF 70 billion Industry Concrete Industry Concrete Water- Refurbish- Water- Refurbish- proofing proofing ment ment Roofing Roofing Sealing & Sealing & Bonding Flooring Bonding Floorin

  21. Slide 21: Growing Demand: Urbanization and Megacities

    GROWING DEMAND FOR SIKA PRODUCTS URBANIZATION AND MEGACITIES  Increasing world population fuels construction markets  Higher demand for performance / specialty concrete  More waterproofing solutions needed  Functional sealing and building envelopes  Innovative roofing solutions  Increased safe

  22. Slide 22: Growing Demand: Lighter, Safer Vehicles

    GROWING DEMAND FOR SIKA PRODUCTS TREND FOR LIGHTER, SAFER VEHICLES  New materials like carbon fiber require bonding solutions  Composite body structures need bonding instead of welding  Adhesives enable stiffer, lighter, safer metal structures  Modular production concepts are based on fast, high

  23. Slide 23: Growing Demand: Trend for Sustainability

    GROWING DEMAND FOR SIKA PRODUCTS TREND FOR SUSTAINABILITY  More efficient use of limited natural resources and energy («green cities»)  Demand for longer life cycles of infrastructure and buildings  Demand for low-energy housing  Drive towards higher recyclability of materials  Demand for safe-

  24. Slide 24: Fragmented Global Industry Offers Growth Potential

    FRAGMENTED GLOBAL INDUSTRY OFFERS SIGNIFICANT GROWTH POTENTIAL Construction Chemical Market 2013 > CHF 50 billion Sika Competitor 1 Competitor 2 Competitor 3 Top 5 companies Competitor 4 with 26% Others market share 24

  25. Slide 25: Sika's Position & Competitive Advantages

    SIKA’S POSITION & COMPETITIVE ADVANTAGES 25

  26. Slide 26: Focus on Target Markets

    FOCUS ON 7 TARGET MARKETS With our core competencies bonding, sealing, damping, reinforcing and protecting Concrete Waterproofing Roofing Flooring Sealing & Bonding Refurbishment Industry 26

  27. Slide 27: Strong Global Position: Competitive Advantages

    STRONG GLOBAL POSITION: COMPETITIVE ADVANTAGES FOR PROFITABLE GROWTH  World market leader in construction chemicals  Leading adhesive producer for industrial markets  Successful focus on innovation (73 patents in 2013)  First mover in emerging markets (38% of sales)  Global footprint with over

  28. Slide 28: Growth Model and Targets 2018

    GROWTH MODEL AND TARGETS 2018 28

  29. Slide 29: Strategy 2018: Sika's Growth Model Will Deliver

    STRATEGY 2018 SIKA’S GROWTH MODEL WILL DELIVER 1. Market penetration - from roof to floor (cross selling, 7 target markets, KPM) - from new-build to refurbishment (life-cycle management) - push and pull market channels (specification, branding) 2. Global technology leadership with continuous innovat

  30. Slide 30: Strategy 2018 Targets

    STRATEGY 2018 TARGETS  Annual sales growth of 6% to 8% (at constant exchange rates, including acquisitions)  Emerging markets with 42% to 45% of group sales by 2018  Operating profit (EBIT) above 10% of net sales  Operating free cash flow above 6% of net sales  ROCE above 20%  Maintain A- rati

  31. Slide 31: 4. Outlook

    4. OUTLOOK BUILDING TRUST

  32. Slide 32: Outlook 2014

    OUTLOOK 2014  Sales growth expectations lifted from 6 – 8% to 9 – 11% (at constant exchange rates)  Continued build-up of growth markets with 8 new factories  Asia/Pacific: double-digit growth expected in China and Southeast Asia, stable volumes in Japan, Korea and Pacific  Latin America: double

  33. Slide 33: 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

  34. Slide 34: Thank You for Your Attention

    THANK YOU FOR YOUR ATTENTION ® BUILDING TRUST Bs

Sika — H1 2014 Earnings Presentation on 6ix