SIKA WITH HIGHER EBIT MARGIN AND SALES GROWTH IN THE FIRST NINE MONTHS OF 2020
- In the first nine months: sales growth of 2.6% in local currencies
- Strongly negative currency effect of –6.0%
- In the first nine months: sales growth of 2.6% in local currencies
- EBITDA margin increased to 18.5%
- Over-proportional EBIT growth and increase in operating profit margin (EBIT) to 13.7%
- Operating free cash flow remains strong and exceeds prior-year figure
- Completion of acquisition of
Adeplast (Romania ), takeover ofModern Waterproofing Group (Egypt ), and construction of new factories inBarranquilla (Colombia ) andChengdu (China )
- Outlook for 2020: For the fiscal year 2020, Sika is expecting slightly lower sales in CHF but EBIT broadly in line with last year, implying an over-proportional rise in EBIT in the second half.
- Confirmation of 2023 strategic targets for sustainable, profitable growth
Sika maintained its growth trajectory over the first nine months of 2020 despite the severe repercussions of the coronavirus pandemic, increasing sales by 2.6% in local currencies to
EXPANSION OF GROSS MARGIN, STRONG EBIT PERFORMANCE
In the first nine months of the year, Sika was able to increase its gross margin to 54.6% (previous year: 53.5%). Lower sales in the months of March, April, and May had a negative impact on profitability, however. Nevertheless, operating profit before depreciation and amortization (EBITDA) increased, exhibiting a margin of 18.5% (previous year: 17.3%). The operating profit margin rose to 13.7% (previous year: 13.4%). Operating profit (EBIT) therefore amounted to
FURTHER MARKET SHARE GAINS DESPITE NUMEROUS LOCKDOWNS
Sales in the first nine months of 2020 includes a strong acquisition effect of 9.2%. In a market suffering from the repercussions of the coronavirus pandemic, Sika was able to win further market share in all regions.
The EMEA region (
The
Growth in the
Global Business recorded a decline in sales of –16.1% (previous year: 3.6%) for the first nine months of the year. In the review period, the automotive sector reported a global decline in output of –23.2%. Although business volumes in the automotive area recovered noticeably in the third quarter, it will likely be a while before figures return to 2019 levels. Sika has been recording growth again in the Chinese car sector since May, and in September it was able to report sales growth in
OUTLOOK FOR 2020
Despite the coronavirus crisis and its repercussions for business results, Sika is confirming its 2023 strategic targets. The company remains aligned for long-term success and profitable growth. With its focus on the six strategic pillars – market penetration, innovation, operational efficiency, acquisitions, strong corporate values, and sustainability – Sika is seeking to grow by 6%–8% a year in local currencies until 2023. From 2021, the company aims to increase its EBIT margin to 15%–18%. Projects in the areas of operations, logistics, procurement, and product formulation should result in an annual improvement in operating costs equivalent to 0.5% of sales.
Sika has been observing a modest upward trend in its construction markets since June, with sales returning to more normal levels. The momentum of global construction activity has picked up thanks to the gradual opening of building sites.
For fiscal 2020, Sika is expecting slightly lower sales in CHF but EBIT broadly in line with last year, implying an over-proportional rise in EBIT in the second half.
Sika’s forecasts assume that the markets will no longer be hit by the almost complete lockdowns that were imposed in March, April and May.
KEY FIGURES FOR FIRST NINE MONTHS OF 2020
In CHF mn | 1. 1.2019 - | 1. 1.2020 - | Change in % |
Net sales | 6,007.3 | 5,805.5 | -3.4 |
Gross result | 3,216.3 | 3,169.7 | -1.4 |
Operating profit before depreciation (EBITDA) | 1,039.8 | 1,071.7 | 3.1 |
Operating profit (EBIT) | 805.9 | 797.4 | -1.1 |
Net profit | 566.8 | 561.5 | -0.9 |
NET SALES OF THE REGIONS
In CHF mn | Year-on-year change (+/- in %) | ||||||
in CHF | In local currencies1 | Currency effect | Acquisition effect2 | Organic growth3 | |||
By region | |||||||
EMEA | 2,586.1 | 2,551.0 | -1.4 | 3.8 | -5.2 | 9.0 | -5.2 |
1,610.0 | 1,500.7 | -6.8 | 0.9 | -7.7 | 7.0 | -6.1 | |
1,112.1 | 1,204.0 | 8.3 | 13.9 | -5.6 | 18.5 | -4.6 | |
Global Business | 699.1 | 549.8 | -21.4 | -16.1 | -5.3 | 0.0 | -16.1 |
Net sales | 6,007.3 | 5,805.5 | -3.4 | 2.6 | -6.0 | 9.2 | -6.6 |
Products for the construction industry | 4,766.4 | 4,769.4 | 0.1 | 6.0 | -5.9 | 11.6 | -5.6 |
Products for industrial manufacturing | 1,240.9 | 1,036.1 | -16.5 | -10.4 | -6.1 | 0.0 | -10.4 |
1 Growth in local currencies including acquisitions. 2 Share of sales of acquired companies not including post-combination growth. The sales growth of the acquired companies since initial consolidation is included in organic growth. 3 Growth adjusted for acquisition and currency effect. The sales growth of the acquired companies since initial consolidation is included in organic growth. |
Webcast on |
A webcast will take place today focusing on the results for the first nine months of the year. Please log in 10–15 minutes prior to the start of the event. |
www.sika.com/9months-webcast |
This link will allow you to participate in the webcast with |
You will also be able to find a recording of the webcast in the Investors section of the Sika website. |
FINANCIAL CALENDAR | |
Net sales 2020 | |
Media conference/analyst presentation | |
2020 results | |
Net sales first quarter 2021 | |
53rd Annual General Meeting | |
Half-Year Report 2021 | |
Results first nine months 2021 |
CONTACT
Corporate Communications &
Investor Relations
+41 58 436 68 21
slappnig.dominik@ch.sika.com
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 building sector and motor vehicle industry. Sika has subsidiaries in 100 countries around the world and manufactures in over 300 factories. Its 25,000 employees generated annual sales of
The media release can be downloaded from the following link:
Media Release
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