Sika posts record sales for 2021 with growth of 17,1%

Despite the persistence of the COVID-19 pandemic and the bottlenecks in the supply of raw materials, turnover increased significantly to reach a record figure of CHF 9,24 billion, which corresponds to growth of 17,1% in local currencies.

The currency effect amounted to 0,2%. The acquisition effect was 2,0% and organic growth was 15,1%. Compared to the same period in 2019, the organic gain was 11,9%.

For Thomas Hasler, Chairman and CEO: “2021 was expected to be a difficult year and it has proven to be very successful for Sika. We benefit from a number of growth platforms and are in an ideal position to achieve long-term success. Thanks to our innovative technologies, we are the partner of choice for many customers in the construction and industrial sectors.We have solutions for all stages of construction market development, and sustained investment programs by governments, which number in the billions, will give new impetus to our business. In addition, we make targeted use of the megatrends that are driving our key markets. The demand for sustainable solutions is enormous. Our products and services allow our customers achieve their ambitious sustainability goals."

MBCC Acquisition Update

In November 2021, Sika signed a firm agreement to acquire MBCC Group (formerly BASF Construction Chemicals). With sales of 2,9 billion Swiss francs, MBCC Group is one of the world's leading suppliers of construction chemicals. This acquisition will complement and expand Sika's product and solution offering in four of Sika's five core technologies and seven of Sika's eight target markets, while strengthening the company's geographic footprint. This transaction will create a major player promoting a stronger commitment to sustainable development.

The construction chemicals and solutions market is expected to reach approximately CHF 80 billion by 2023 and, being highly fragmented, it will continue to offer substantial growth opportunities even after the acquisition of MBCC by Sika. MBCC achieves approximately 53% of its sales in the building systems sector and the remaining 47% in the concrete admixtures segment. The acquisition is subject to regulatory approval. Sika is confident that all required approvals will be obtained in due time and will work closely with the authorities. Closing of the acquisition is expected in the second half of 2022.

Market share gains in all regions in 2021

In an environment characterized by a number of temporary lockdowns, Sika grew faster than the market in all regions in 2021. Distribution activities also recorded significant gains in all regions.

The EMEA region (Europe, Middle East, Africa) recorded an increase in sales in local currencies of 16,1% (previous year: 4,4%). As in 2020, the growth of the distribution and repair activities exceeded that of the other business sectors. Almost all countries in the region have achieved double-digit growth rates. Countries in the Middle East, as well as Eastern Europe, including Russia, the United Kingdom, and countries in Africa benefited from renewed growth. In general, purchases of Sika product solutions through e-commerce platforms have seen an above-average increase.

During the reporting period, Sika acquired Kreps LLC, a leading manufacturer of mortar products in Russia, further expanding its existing product portfolio and geographic presence.

The Americas region recorded growth in local currencies of 21,0% (previous year: 1,0%). In the United States, Sika has gained considerable momentum. Growth was driven primarily by large-scale renovation projects and new construction projects in the area of ​​distribution and database centers. Strong growth rates were achieved in particular in Mexico, Colombia, Brazil, Peru and Chile. In the Americas region, the strategic focus of business activities on major cities and metropolitan areas again paid off, as did the focus on large infrastructure projects and the targeted realization of cross-selling potential.

During the period under review, Sika acquired DriTac, a US company with a strong position in the parquet bonding market. In addition, a manufacturer of mortar products in Brazil was integrated into the Sika group under the name BR Massa. Thanks to this acquisition, Sika has improved its position in one of the main economic regions of Brazil, while increasing its production capacity.

In July, the company acquired American Hydrotech Inc. in the United States and its Canadian subsidiary Hydrotech Membrane Corporation. Hydrotech is an established manufacturer of liquid membranes and offers complete roofing and waterproofing solutions. It is the undisputed North American market leader in the growing segment of green roof systems.

In addition, Sika acquired the family business Bexel Internacional SA de CV, a major manufacturer of tile adhesives and stuccos in Mexico. With this acquisition, Sika strengthens its position in the fast-growing Mexican market for mortar products and significantly increases its production capacity with five strategically located production facilities.

Revenue in local currencies in the Asia/Pacific region increased by 19,4% (previous year: 12,6%). Last year, China in particular took advantage of the ongoing strong growth momentum with double-digit organic growth rates and successfully expanded its infrastructure and distribution businesses. India continued to experience dynamic development, while Southeast Asian countries slowly recovered from severe lockdowns in the last quarter of the year. In Japan, the trend remains difficult. Investment activity in the country's construction market is still subdued.

During the reporting period, Sika acquired Hamatite, the adhesives division of Yokohama Rubber Co., Ltd. Hamatite is a market leader in Japan, offering adhesives and sealants for the automotive and construction industries. This acquisition significantly improves Sika's position in the Japanese market, giving it fuller access to all major Japanese automakers and a wider range of sealants and adhesives for the Japanese construction industry.

In China, Sika acquired Shenzhen Landun Holding Co. Ltd, a full-line manufacturer of sealing products and technologies. The company operates two state-of-the-art production facilities that manufacture a full range of membranes and coatings for various waterproofing applications, primarily supplying infrastructure projects and commercial projects.

In the Global Business segment, Sika recorded growth in local currencies of 4,3% (previous year: -11,4%). During the past fiscal year, the automotive industry experienced significant bottlenecks in the electronic component supply chain. While forecasts at the start of the year predicted a strong recovery in the volume of new vehicles built compared to the previous year, there was actually a sharp decline in the second half of the year due to the lack of availability of semiconductors. .

Nevertheless, Sika expects megatrends in modern automotive production, namely electromobility and lightweight construction, to continue to drive growth. In particular, the transition from traditional transport systems to electromobility has accelerated during the pandemic and is benefiting from various government support programs in a number of countries.

PROSPECTS AND ACHIEVEMENTS

Sika confirms its strategic objectives for 2023. The company remains focused on long-term success and profitable growth. By focusing on the six strategic pillars - market penetration, innovation, operational efficiency, acquisitions, strong corporate values ​​and sustainability - Sika aims to grow 6-8% per year in local currencies through 2023. From 2021, the company is aiming for a higher EBIT margin of 15-18%. Projects in the areas of operations, logistics, supply and product formulation should enable an annual improvement in operating costs equivalent to 0,5% of sales.

For fiscal year 2021, Sika expects an over-proportionate increase in EBIT and an EBIT margin of 15%.