Sika was able to continue its profitable growth even in a challenging economic environment. The first half of 2023 was dominated by the completion of the largest acquisition in the company’s history. Thanks to the takeover of MBCC Group, Sika is moving to the next strategic growth level, ideally positioning itself for the future. Next to additional annual sales of CHF 2.1 billion and many new innovations, 6,000 new employees are joining Sika. Sika and MBCC complement one another extremely well. The joint forces of the two businesses create a leading innovator in the construction chemicals market.

The environment was challenging in the first six months of 2023. High inflation rates and the substantial rise in interest rates weighed on the construction industry. Despite this backdrop, Sika managed to increase sales to CHF 5,345.5 million (+1.8%). In local currencies, this corresponds to a sales growth of 7.9%. The strong Swiss franc was responsible for a significant foreign currency impact (-6.1%).

Thomas Hasler, CEO, said: “Market conditions were challenging in the first semester, as expected. We are proud of having successfully met this challenge, in addition to completing the MBCC acquisition. We are currently expecting the market environment to improve in the second half of the year. Major construction and infrastructure projects are planned or about to be implemented in all regions, and growth potential remains apparent despite a subdued global economy. With our 33,000 employees, we are well placed to benefit from our strong market position and to continue to gain market share in a weak environment.”

In the first half of the year, Sika expanded its material margin significantly to 52.7% (previous year: 49.4%), and thereby takes an important step on the road to a material margin recovery. Profit at EBIT level was shaped by one-time effects. In the prior-year period, Sika recorded an extraordinary book profit of CHF 168.3 million due to the divestment of its European industrial coating business. In addition, the first half of 2022 saw one-off expenses amounting to CHF 28.0 million incurred in connection with the MBCC acquisition. In the first half of 2023, Sika had costs of CHF 89.5 million relating to the acquisition and integration of MBCC. When adjusted for these effects, Sika expanded its EBIT margin significantly to 14.0% (first half of 2022: 13.4%). Excluding the one-time effects, EBIT increased to CHF 749.9 million in the first half of 2023 (first half of 2022: CHF 701.6 million). When one-time effects are included, EBIT amounted to CHF 660.4 million (first half of 2022: CHF 841.9 million).

Overall, Sika is anticipating the costs relating to the MBCC takeover to amount to approximatively CHF 200 million (of which CHF 167.8 million already have been booked).

Operating free cash flow significantly increased to CHF 316.5 million (2022: CHF 39.7 million). Focused net working capital management and the normalization of the supply chains were the main contributors.

OUTLOOK FOR THE YEAR 2023

For the current fiscal year, Sika is convinced that it will successfully continue its strategy built on sustainable and profitable growth even in a challenging economic environment. With its innovative technologies, Sika is the partner of choice for many customers in the construction and industrial sectors. These sectors are being heavily shaped by the megatrend of sustainability, coupled with the rise of automation, digitization, and easy-to-apply products.

For the full 2023 fiscal year, Sika is expecting a sales increase in local currencies of above 15%, after factoring in the acquisition effect of the MBCC takeover (previously: 6–8% in local currencies excluding MBCC), and confirms an anticipated over-proportional rise in EBIT, excluding the influence of the MBCC takeover.