Sika once again posted record results in the first half of 2021, despite the COVID-19 pandemic continuing to seriously impact business in all regions. The company generated strong growth rates and continued its growth trajectory, with a new sales record of CHF 4,448.7 million. This equates to an increase of 23.5% in local currencies. Sales growth in Swiss francs amounted to 23.1%, which includes a slightly negative currency effect of -0.4%. The acquisition effect was 1.1%. Organic growth in the first half of the year amounted to 22.4%. Compared with the same period in 2019, organic growth is already at 11.3%.

 

The increase in the costs of raw materials fueled by supply bottlenecks resulted in a lower material margin of 53.3% (previous year: 54.6%). Thanks to higher volume and improved efficiencies of production processes, operating leverage increased. With a margin of 19.5% (previous year: 16.4%), operating profit before depreciation and amortization (EBITDA) markedly increased.

 

Operating profit (EBIT) amounted to CHF 685.9 million (previous year: CHF 410.2 million), an increase of 67.2% on the previous year. Alongside operating leverage, EBIT was positively impacted by efficiency-enhancing measures as well as additional synergies from acquisitions. The focus on liquidity and cash management resulted in a record high operating free cash flow of CHF 318.4 million (+26.4%).

 

"In a market environment that remained challenging, we once again performed successfully, achieving strong business results in the first six months of 2021. With our innovative strength, our customer focus, and our leading market position, we secured strong growth in all regions and expanded our market share in a targeted manner. COVID-19 will continue to pose a challenge. We are well equipped and have proven a high level of resilience against a difficult economic backdrop, creating new growth platforms. Sika has a strong corporate culture and our local teams working with our regional and corporate organizations are ready for the challenges that the second half of the year may bring." said Thomas Hasler, CEO of Sika.

 

The COVID-19 pandemic is still very much present in all regions. In Africa, Asia, and Latin America in particular, economic output continues to be impacted by low vaccination rates. In addition, there has been a deterioration in the availability of raw materials. Thanks to its leading market position, strong procurement organization, and rapid, targeted implementation of measures, Sika was able to capture market share in all regions and achieve record results.

 

Despite the COVID-19 pandemic and its repercussions for operating results, Sika is confirming its 2023 strategic targets. The company is still clearly 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 up to 2023. From 2021, the company is aiming 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.

 

For the 2021 fiscal year, Sika is expecting sales growth in local currencies of 13%–17% (previously: double-digit sales growth in local currencies) as well as an over-proportional EBIT increase. The EBIT margin will reach 15% for the first time, despite a challenging raw material price development.