Ad hoc disclosure in accordance with Article 53 of the Listing Rules of SIX Exchange Regulation
SIKA WITH STRONG PERFORMANCE IN DEMANDING MARKETS
- Sales at CHF 7,998.5 million (+16.6% in CHF)
- Sales increased by 18.5% in local currencies
- Operating profit (EBIT): CHF 1,231.5 million (+16.8%)
- Acquisition of Sable Marco (Canada) and UGL (USA)
- New plants opened in Tanzania, Ivory Coast, Bolivia and the USA
- Outlook for the 2022 financial year confirmed:
- Sales increase in local currencies by more than 15% and exceeded CHF 10 billion for the first time
- Disproportionate EBIT increase expected
- Confirmation of the strategic goals 2023 for sustainable, profitable growth
- Completion of the MBCC acquisition targeted for the first half of 2023
Sika continued to develop well in a volatile economic environment and achieved another record result in the first nine months of the 2022 financial year. Sales rose noticeably to CHF 7,998.5 million (+16.6%), which corresponds to growth of 18.5% in local currencies. The currency effect was –1.9%. The acquisition effect was 3.4%, representing organic growth of 15.1% over the period.
Thomas Hasler, Chief Executive Officer: “In the first nine months of the current financial year, we achieved impressive results under persistently challenging conditions. With our broad-based business model and our global geographic presence, we have proven to be crisis-resistant and have continued to grow strongly. Our goal is to achieve sales of CHF 10 billion for the first time in 2022 and to increase our operating result disproportionately.»
HIGHER RAW MATERIAL COSTS, EBIT INCREASE BY 16.8%
Sharply increased raw material costs led to a lower material margin of 49.3% in the first nine months (previous year: 52.6%). Further economies of scale were achieved through the consistent use of price increases and through the use of synergies and efficiency gains along the entire value chain. The operating profit margin was maintained at a high level of 15.4% (previous year: 15.4%). The operating result (EBIT) thus amounts to CHF 1’231.5 million (previous year: CHF 1’054.0 million), which corresponds to an increase of 16.8% compared to the previous year. EBIT includes a gain of CHF 168 million from the sale of the European industrial coatings business. It also includes expenses of CHF 39 million related to the proposed acquisition of MBCC. Net profit increased to CHF 885.9 million (previous year: CHF 765.1 million).
DOUBLE-DIGIT GROWTH IN ALL REGIONS
The global construction industry is shaped by the megatrend climate change as well as increasing automation, digitization and easy-to-use products that are increasingly changing the construction industry. There is a growing demand for solutions that increase climate efficiency and reduce CO2 emissions and use resources sparingly. With its broad product portfolio, Sika is ideally positioned to offer its customers technologies that enable them to reduce their CO2 footprint, while increasing longevity and minimizing resource consumption during construction. In addition, Sika benefits from broad-based, global, state-driven economic development programs.
That EMEA region (Europe, Middle East, Africa) recorded an increase in sales in local currencies of 10.5% for the first nine months (previous year: 17.6%). Sika’s distribution business, which includes sales via DIY stores, DIY stores and online platforms, recorded a decline in the last two quarters of the current financial year. The project business, driven by economic stimulus programs and new investments in the energy sector, is proving to be more robust and only recorded a slight decline. Countries in Africa and the Middle East continue to benefit from strong double-digit growth.
In the first half of the year, Sika moved into a new location in East African Tanzania and now also produces mortar on site in addition to concrete admixtures. It also expanded its facility in Ivory Coast, West Africa. This site is now twice as large as before and not only has additional production facilities, but also new storage capacities, office space and laboratories.
That America region recorded growth in local currencies of 31.9% (previous year: 19.3%). Sika generated most of this growth in US infrastructure projects, which received the equivalent of CHF 200-250 billion in government-funded investments in 2022 alone. Construction activity focuses on the modernization and expansion of subway lines, bridges, tunnels and motorways. High demand also stems from investments in commercial construction projects, including stadiums, warehouses and data centers. Extensive investments are also being made in the USA in connection with the re-import of industrial know-how from Asia.
With the acquisition of Sable Marco in Canada and UGL in the USA, Sika acquired two companies that sell their high-performance products through established sales channels. In addition, a new mortar plant was commissioned in Bolivia and a production facility for concrete admixtures was opened near Washington DC in the USA.
sale in Asia Pacific Region in local currencies increased by 17.6% (previous year: 20.7%). In China, the distribution business in particular benefited from continued strong growth momentum with double-digit growth rates, while the project business was affected by additional lockdowns due to the COVID-19 pandemic. Nevertheless, Sika achieved double-digit growth in China. Business in India continued to develop dynamically and in the countries of Southeast Asia double-digit growth was achieved in challenging markets.
In which Global Business Segment Sika achieved growth in local currencies of 22.0% (previous year: 9.9%) and thus grew faster than the overall market. The high demand for new vehicles and a normalization of the supply chains have boosted business. Sika expects the automotive market to recover in the medium term with sustained growth momentum. This is being driven by the transformation of the automotive industry, with electromobility and alternative drive concepts playing a key role.
ACHIEVE FURTHER GROWTH THROUGH SUSTAINABILITY AND ZERO GOALS
Sustainability has been a core element of Sika’s growth strategy for over a decade and will be anchored even more broadly in the future as part of Sika’s net zero promise. With its strong innovative strength, Sika develops sustainable solutions for the construction sector and for industrial applications, for example in the automotive industry. The company is focused on highly targeted innovation to reach its net-zero goals. Sika’s goal is to continue to grow sustainably and to use innovations to decouple the company’s growth from greenhouse gas emissions.
STRATEGIC FIT OF MBCC CONFIRMED – OUTLOOK FOR 2022
Sika confirms the strategic fit of the takeover of MBCC. Unconditional approval was received from authorities in most countries including Japan, China, Brazil, South Africa, Saudi Arabia, Turkey and Thailand. The acquisition is clearly value-added and Sika confirms annual synergies of CHF 160-180 million. A suitable buyer is being sought for part of MBCC’s blending business. The completion of this acquisition is planned for the first half of 2023.
For the 2022 financial year, Sika expects an increase in sales in local currencies of more than 15% with a disproportionate increase in EBIT.
KEY FIGURES FOR THE FIRST NINE MONTHS OF 2022
|In CHF million||1/1/2021 – 9/30/2021||1/1/2022 – 9/30/2022||difference in %|
|Operating profit before depreciation (EBITDA)||1,327.5||1,521.4||14.6|
|Operating result (EBIT)||1,054.0||1,231.5||16.8|
|profit after taxes||765.1||885.9||15.8|
NET SALES BY REGION
|In CHF million||1/1/2021 – 9/30/2021||1/1/2022 – 9/30/2022||Annual change
(+/- in %)
|In CHF||In local currencies1||currency effect||acquisition effect2||Organic
|Products for the construction industry||5,653.5||6,611.1||16.9||18.8||-1.9||2.1||16.7|
|Products for industrial manufacturing||1.209.2||1,387.4||14.7||16.9||-2.2||9.3||7.6|
|1 Growth in local currencies including acquisitions.
2 Revenue contribution from acquired companies excluding post-merger growth. Includes lost sales from discontinued operations. The sales growth of the acquired business since the first consolidation is included in the organic growth.
3 Growth adjusted for acquisitions, discontinued operations and currency effects. The sales growth of the acquired business since the first consolidation is included in the organic growth.
Webcast today, October 21, 2022 at 3 p.m. (CEST)
|A webcast will be held today focusing on the results for the first nine months of the year. Please log in 5 minutes before the start of the event.
You can use this link to participate in the webcast with Thomas Hasler (CEO), Adrian Widmer (CFO) and Dominik Slappnig (Head of Corporate Communications & IR).
A recording of the webcast can also be found in the Investors section of the Sika website.
|Net sales 2022||Wednesday 11 January 2023|
|Media conference / analyst presentation on the annual results for 2022||Friday February 17, 2023|
|55th Annual general meeting||Tuesday, March 28, 2023|
|Net sales first quarter 2023||Tuesday April 18, 2023|
|Half-year report 2023||Friday 21 July 2023|
|Results for the first nine months of 2023||Friday 20 October 2023|
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SIKA COMPANY PROFILE
Sika is a specialty chemicals company with a leading position in the development and production of systems and products for bonding, sealing, damping, reinforcing and protecting in the construction and automotive industries. Sika has branches in 101 countries around the world and produces in over 300 factories. More than 27,000 employees generated annual sales of CHF 9.3 billion in 2021.
The media release can be downloaded from the following link:
Letter to shareholders 9 months 2022_DE