SIKA registers marginal decline in Q1 sales

SIKA registers marginal decline in Q1 sales

Strong growth of 15.2% in global business, closing of MBCC acquisition still targeted for first half of 2023

  • By ICN Bureau | April 18, 2023

Despite challenging economic conditions, Sika ended the first quarter of 2023 with a slight growth. Sales in local currencies and organic growth both increased by 1.2%. In Swiss franc terms, Sika posted sales of CHF 2,325.9 million.

Compared with the strong prior-year period and due to the stronger Swiss franc, the sales development in CHF amounted to -3.0%. This figure includes a currency effect of -4.2%. The more dynamic markets in the Americas and Asia/Pacific regions offset the weaker performance in Europe. Growth in Global Business clearly outstripped the market, and was once again in double digits. Sika achieved a substantial increase in the material margin in the first quarter, marking an important step on the road to material margin recovery.

Commenting on the result, Thomas Hasler, CEO, SIKA, said: "Sika successfully navigated the economic challenges in the first quarter. With our balanced product and sales mix we could smooth out fluctuations in the individual regions. As anticipated, the first quarter was challenging, but – given the recovery expected in the markets – we are sticking with our growth ambitions for full-year 2023. We expect that the acquisition of MBCC will be closed in the first half of the year. With MBCC, we are expanding our leadership position for sustainable solutions in the construction industry even further. We are thus strengthening the platform underpinning our Strategy 2028 for profitable, long-term growth and securing a sustained increase in value for all our stakeholders – for our customers, for our employees, and for our shareholders."

MBCC acquisition in the final stages

The acquisition of MBCC is now in the final stages. In the first quarter of 2023, Sika signed a purchase agreement with the private equity firm Cinven for parts of MBCC's admixture business. This business achieved sales of around CHF 920 million in fiscal 2022. Closing of the acquisition is scheduled for the first half of 2023. The acquisition of MBCC is significantly value-enhancing. Together with MBCC, Sika will further strengthen its growth platforms and expects annual synergies of CHF 160–180 million.

Outlook 2023

For 2023, Sika is confident that it can successfully continue its strategy built on sustainable and profitable growth even in a challenging economic environment. Thanks to its innovative technologies, Sika is the partner of choice for many customers in the construction and industrial sectors. These sectors are strongly characterized by the megatrend of climate change as well as by increasing automation, digitalization, and easy-to-apply products.

For the 2023 fiscal year, Sika expects sales to rise by 6–8% in local currencies and anticipates an over-proportional increase in EBIT (excluding the impact of the MBCC acquisition).

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