Sika AG: Solid growth and significant increase in profit
- Sales growth of 6.0% to CHF 3 630.1 million (5.4% in local currencies)
- 10.1% growth in emerging markets
- Significant increase in gross result to 52.6% (previous year: 50.8%)
- Above-average 32.3% rise in net profit to CHF 223.9 million
Thanks to its strong global position, Sika lifted net sales by 6.0% in the first nine months of the year despite the challenging environment in Europe. The growth in sales and the substantial widening of the gross result translated into an above-average increase in profitability.
On the back of a strong global presence, acquisition activities and the successful growth strategy in place in the emerging markets, Sika increased net sales by 6.0% to CHF 3 630.1 million (previous year: CHF 3 424.8 million), thus successfully countering the impact of the weak European and Chinese markets.
Double-digit increases were recorded in both North America, up 11.1% in local currencies to CHF 540.0 million, and Latin America, which posted broad-based growth of 16.4% in local currencies to CHF 434.7 million. Sika saw stronger growth in the Region Asia/Pacific, up 3.4% in local currencies to CHF 626.6 million. Whereas the Chinese construction industry is currently in a weaker phase, the markets in Southeast Asia turned in very positive performances.
The economic climate in Europe remains difficult. While countries such as Russia, Romania and Norway witnessed growth in Europe North, the situation for the majority of countries in Europe South has not yet taken a turn for the better. Europe North reported decreasing growth of -3.1% in local currencies to CHF 956.4 million for the first nine months; Europe South saw growth of 1.5% in local currencies to CHF 614.4 million. Adjusting for the positive acquisition effect gives decreasing growth of -7.5%.
Sika was able to pass on raw material price increases to the market in the period under review and to expand the gross result to 52.6% (previous year: 50.8%). Operating profit (EBIT) improved by 21.2% to CHF 340.9 million (previous year: CHF 281.3 million). The EBIT margin now stands at 9.4% (previous year: 8.2%). Sika improved net profit after taxes by an above-average 32.3% to CHF 223.9 million (previous year: CHF 169.3 million).
Looking at the year as a whole, Sika expects the emerging markets to continue driving growth. Construction activity appears to be gradually picking up in China, but the impending change of leadership makes any visible improvement unlikely before 2013. The outlook remains challenging for Europe, while the Region North America can look to deliver a positive performance in the 4th quarter as well.
Sika takes the view that raw material prices will follow a stable trend over the entire year. The company is thus confirming the positive margin development and predicts a substantial year-on-year increase for full year 2012.
January 10, 2013: Net sales 2012
February 28, 2013: Full-year results 2012; media conference/analysts' presentation
April 16, 2013: Shareholder letter (first quarter 2013); Annual General Meeting
July 30, 2013: Shareholder letter (Half-Year Report 2013)
October 30, 2013: Shareholder letter (nine months 2013)
Sika Schweiz AG
Sika AG, located in Baar, Switzerland, is a globally active specialty chemicals company. Sika supplies the building and construction industry as well as manufacturing industries (automotive, bus, truck, rail, alternative energies, building components). Sika is a leader in processing materials used in sealing, bonding, damping, reinforcing and protecting load-bearing structures. Sika's product lines feature high-quality concrete admixtures, specialty mortars, sealants and adhesives, damping and reinforcing materials, structural strengthening systems, industrial flooring as well as roofing and waterproofing systems. Worldwide local presence in 76 countries and some 15,300 employees link customers directly to Sika and guarantee the success of all partners. Sika generates annual sales of CHF 4.556 billion. Visit our website at www.sika.com.