Sika sets new records in sales and profit - Organic growth accelerates further

Material Margin within 54-55% range and EBITDA up over-proportionally

Sika managed to raise its material margin significantly to 54.7% (previous year: 53.1%), bringing it within the range of 54% to 55%. Efficiency gains and synergies from the MBCC acquisition have led to an EBITDA margin of 19.1% (previous year: 17.8%), despite inflationary cost pressure, equivalent to a 13.2% increase. Operating profit before depreciation, and amortization (EBITDA) in the first nine months were CHF 1,701.7 million, setting a new record. 

With high operating free cash flow of CHF 849.5 million (previous year: CHF 896.5 million), Sika is well placed to further reduce the net debt incurred through the MBCC acquisition.

Growth in all regions

In the EMEA region (Europe, Middle East, and Africa), the positive trend towards more infrastructure and commercial construction projects continues. In the first nine months of 2024 the region recorded a sales growth of 9.0% in local currencies (previous year: 10.6%). Increased price stability, solid labor market figures, stabilizing purchasing power due to a recovery in real wages, and lower interest rates indicate that the economy in the region is picking up gradually.

At the local level, the countries in the Middle East, Africa, and Eastern Europe were able to generate further growth. Germany recorded initial positive growth development, but this has not yet lifted the country to a positive growth level. The automotive and industrial manufacturing sectors are facing declining volumes, due to the strong downturn in demand for new vehicles in Europe.

Sales in the Americas region increased by 12.2% (previous year: 14.5%) in local currencies during the reporting period. The USA, especially, had strong sustained growth over the year to date. The positive trend is being supported by government-funded infrastructure projects and the reshoring of production facilities. The business with roofing membranes and green roof systems has developed very well. Latin America also had solid growth that contributed to the positive trend in the region.

Sika successfully acquired Kwik Bond, a manufacturer of polymer systems for the refurbishment of concrete infrastructures in the USA. For over 30 years, Kwik Bond has specialized in the refurbishment of bridge decks. Furthermore, Sika acquired Vinaldom in the Dominican Republic, an established family-owned company with high-value product solutions for concrete construction. A state-of-the-art plant for producing macro-synthetic fibers for the reinforcement of concrete structures was commissioned in Lima, Peru. This innovative technology enables Sika to further expand its position as a leading supplier of the mining industry and strong partner for infrastructure projects.

The Asia/Pacific region increased its sales by 4.7% (previous year: 13.1%). In China, Sika managed to grow slightly in the distribution business despite sluggish markets, while the projects business declined. South-East Asia, on the other hand, gained growth momentum during the year, posting high single-digit growth figures. In the automotive sector, Sika further expanded its content per car with local and international automotive manufacturers in China and India. 

In Liaoning, the largest province in Northeast China, Sika opened a highly efficient plant for producing mortars, tile adhesives and waterproofing solutions, enabling it to meet the growing demand in the distribution business. Furthermore, Sika has more than doubled the production capacity at the Bekasi plant, its biggest manufacturing facility in Indonesia.

Outlook for 2024

Sika is confident that it can successfully maintain its sustainable and profitable growth strategy in 2024 as the economic environment slowly improves. 

For 2024 Sika expects sales growth in local currencies of 6% to 9% and an over-proportional increase in EBITDA.