Sika Achieves Record Results in 2017

record profit

The high growth momentum produced above‐average increases in the operating result and profit. Raw material price increases and volatility posed a challenge, with access to raw materials in China, for example, being limited by environmental constraints introduced by the government. Thanks to persistent cost management, margins were boosted further, while record figures were recorded for both EBIT (CHF 896.3 million, +12.7%) and net profit (CHF 649.0 million, +14.5%).

GROWTH IN ALL REGIONS

Sales in the EMEA region (Europe, Middle East, Africa) increased by 7.5% in local currencies (previous year: 4.6%). The major EU countries, with the core markets of France, Italy, and the United Kingdom, recorded strong growth rates. The Middle East, Eastern Europe, and Africa all delivered double-digit growth.

At 18.4%, it was the North America region that posted the strongest growth (previous year: 7.8%), of which 8.5% was through acquisitions. Sika reported a significant increase in its business volume in the USA, growing much more rapidly than the local construction market in the reporting year. The positive development of the North American business was attributable in particular to the targeted investment in this region over the last few years.

The Latin America region increased sales by 3.3% (previous year: 5.1%). Both Mexico and Argentina generated above-average growth. By contrast, construction activity continued to develop modestly in the countries that are more dependent on the raw material sector, such as Brazil, Peru, and Chile.

Sales in the Asia/Pacific region rose by 5.2% (previous year: 3.6%). High growth rates were recorded in China, while double-digit growth was achieved in Australia, New Zealand, and Thailand.

CONTINUITY IN THE MANAGEMENT

Following the departure of Jan Jenisch, the Board of Directors appointed Paul Schuler as new CEO of the Group with effect from July 1, 2017. Paul Schuler has worked for Sika for some 30 years, and has been a Member of Group Management since 2007. His responsibilities have included the build-up of the industry business as well as management of the North America and EMEA regions.

19 KEY INVESTMENTS AND 74 NEW PATENTS

The Group’s accelerated expansion into growth markets continued under Paul Schuler’s leadership in 2017, with a total of 19 key investments in nine new factories, three additional national subsidiaries, and seven acquisitions.
More than 900 employees working on basic research and the development of new products at 20 regional technology centers are the key drivers of our innovative strength. 74 new patent applications were filed in the 2017 business year, and numerous new products were launched in all target markets.

DIVIDEND INCREASE OF 15.6% PROPOSED

For the Annual General Meeting of April 17, 2018, the Board of Directors is proposing to shareholders a 15.6% increase in the gross dividend to CHF 111.00 per bearer share (2016: CHF 96.00) and CHF 18.50 per registered share (2016: CHF 16.00).

OUTLOOK FOR 2018: GROWTH OF MORE THAN 10% AND HIGHER PROFIT

The foundations for future growth were laid in 2017 with the opening of nine new factories, the establishment of three further national subsidiaries, and the acquisition of seven companies. The strong sales organization, the well‐filled product pipeline, and these 19 key investments give the Group reason to look to the future with optimism.

For the 2018 business year Sika is anticipating an increase in sales of more than 10%. Raw material price increases and volatility remain a challenge in the current year. Operating profit (EBIT) should continue to grow at a disproportionately high rate in 2018. The unknown outcome of Saint‐Gobain's hostile takeover attempt remains an element of uncertainty for the future.