Sika Achieves Record Sales, Net Profit Surges 16%

Growth in all regions

In the first half of the year, sales in the EMEA region (Europe, Middle East, Africa) increased by 7.0% (previous year: 6.6%). The core markets Germany, France, Switzerland, Italy and the UK achieved solid growth rates. Eastern Europe and Africa posted double-digit growth. Bitbau Dörr, a leading manufacturer of waterproofing systems, was acquired in Austria. Furthermore, a new factory for concrete admixtures was opened in Tanzania and a further national subsidiary was founded in Senegal. In Kazakhstan, concrete admixture and mortar production in Almaty was relocated to a larger site.

At 17.4%, it was the North America region that posted the strongest growth (previous year: 12.7%), of which 8.7% was through acquisitions. Sika boosted its business volume significantly in the USA achieving strong double-digit growth of around 20%, thus growing much more quickly than the North American construction market. Targeted investments that have been made in North America over the last few years contributed substantially to this positive business performance. These include the investment in sales force, the acquisition of companies and the expansion of the supply chain with new factories close to fast-growing metropolitan areas.

In the Latin America region sales increased by 2.7% in the first half-year, compared to 5.9% in the corresponding period of the previous year. In particular, the large countries in the region, including Mexico and Argentina, produced above-average performance. In Brazil, the effects of the difficult economic and political situation continued to have a restrictive impact on business. Furthermore, construction activity in the raw material-based countries in the region has been subdued. In the southeast of Mexico, a new factory for mortar products came into operation.

Sales in the Asia/Pacific region increased by 4.1% (previous year: 4.6%). The markets in Southeast Asia, with the exception of Indonesia and Singapore, achieved high growth rates. In Singapore, investment in state-funded residential construction projects remained at a low level, while in Indonesia investments in infrastructure fell. In China, the construction industry continued to stabilize in the first half of 2017, enabling Sika to achieve high single-digit growth.

Outlook 2017

The strategic targets 2020 were successfully pursued in the first half of 2017, with new record results achieved. The strong start to the year supports the target for the full year, which aims at a 6-8% increase in sales to more than CHF 6 billion for the first time. Volatile and rising commodity prices present a challenge in the current year. EBIT and net profit are once again expected to increase at disproportionately high rates. The successful growth strategy with the new targets for 2020 will continue in 2017. The unknown outcome of Saint-Gobain’s hostile takeover attempt remains an element of uncertainty for the future.

¹ As of December 31, 2016/June 30, 2017.
² Shareholders’ equity divided by balance sheet total.
³ Capital employed = current assets, PPE, intangible assets less cash and cash equivalents, current securities, current liabilities (excluding bank loans and bond).