half-year results 2014 and strategy 2018 · half-year results 2014 and strategy 2018 ... higher...
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HIGHLIGHTS HALF-YEAR 2014 Strategy 2018 well on track
18.1% sales growth (10.6% in CHF) to CHF 2,656.9 million
High growth dynamic in all regions
Sales up 18.1% in emerging markets
25.7% increase in net profit to CHF 177.6 million
3 new factories in Brazil, Indonesia, and India
3 acquisitions with CHF 53 million in sales
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KEY FIGURES HALF-YEAR 2014 HIGH SALES GROWTH – ABOVE-AVERAGE INCREASE IN PROFIT
in CHF mn 2013 2014 Δ %
Net sales 2,402.5 2,656.9 +10.6%
Gross results as % of net sales 53.2 53.3
EBITDA 293.4 347.7 +18.5%
EBIT 220.2 266.4 +21.0%
Net profit 141.3 177.6 +25.7%
Operating free cash flow 15.3 36.6
ROCE in % 18.0 20.9
+ 16.8%
+ 21.7%
+18.1% + 6.5%
GROWTH MOMENTUM CONTINUES HALF-YEAR 2014 18.1% SALES GROWTH (10.6% IN CHF)
Growth of 18.1% in Emerging Markets
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,
335
296
1,336
485
North America
Latin America
EMEA
Asia/Pacific
HY 1 / 2013 HY 1 / 2014 (in CHF mn, growth at constant exchange rates)
Opening of Sika plant:
7th plant in Brazil (Aparecida de Goiânia, January 2014)
2nd plant in Indonesia (Surabaya, May 2014)
6th plant in India (Jhagadia, June 2014)
ACCELERATED BUILD-UP OF EMERGING MARKETS INVESTMENTS IN HALF-YEAR 2014
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India Brazil
LEADING ROLE IN MARKET CONSOLIDATION ACQUISITIONS HALF-YEAR 2014
Company Country Target Market
Klebag Chemie AG Switzerland Sealing & Bonding, Flooring
Company for flooring and coating products
South Korea Flooring
Lwart Química Ltda. Brazil Waterproofing, Roofing
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Total sales: CHF 53 million
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PROFIT & LOSS HALF-YEAR 2014 STRONG IMPROVEMENT OF KEY FINANCIALS
in CHF mn 2013 NS 2014 NS Growth
Net sales 2,402.5 100 % 2,656.9 100 % + 10.6%
Gross results 1,277.4 53.2 % 1,417.4 53.3 % + 11.0%
Personnel cost -523.4 -21.8 % -550.6 -20.7 % + 5.2%
Other OPEX -460.6 -19.2 % -519.1 -19.5 % + 12.7%
Depreciation -73.2 -3.0 % -81.3 -3.1 % + 11.1%
EBIT 220.2 9.2 % 266.4 10.0 % + 21.0%
Financial expense -23.8 -18.3
Income taxes -55.1 -70.5
Net profit 141.3 5.9 % 177.6 6.7 % + 25.7%
Tax rate 28.1 % 28.4 %
Non-material cost -1,057.2 -44.0 % -1,151.0 -43.3 % + 8.9%
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SALES HALF-YEAR 2014 NEGATIVE CURRENCY IMPACT OF 7.5%
in CHF mn 2013 2014 Δ %
Net sales 2,402.5 2,656.9 + 254.4 +10.6
Organic growth + 237.5 +9.9
Acquisition effect + 197.0 +8.2
Currency effect - 180.1 -7.5
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SALES GROWTH BY QUARTER CONTINUED GROWTH MOMENTUM
-1.3%
7.0% 7.3% 8.2%
14.1%
6.6%
+1.1%
1.2% 3.3%
9.6%
9.2%
7.4%
acquisition organic
Net sales 12 month rolling
at constant FX
-0.2%
8.2%
10.6%
17.8%
in CHF mn Q1 PY Q2 PY Q3 PY Q4 PY Q1 CY Q2 CY
Quarterly sales
1,043.1 1,359.4 1,405.2 1,334.5 1,206.2 1,450.7
23.3%
14.0%
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SALES HALF-YEAR 2014 GROWTH IN ALL REGIONS
1,336 355 485 296
EMEA NorthAmerica
Asia/Pacific Latin America
80%
20%
Construction
Industry
+ 21.7 % + 6.5 % + 18.1 % + 16.8 % Growth (at constant FX)
- 3.3 % - 6.5 % - 11.6 % - 19.2 % FX impact
+ 14.7 % + 0.0 % + 4.0 % + 4.1 % Acquisition
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GROSS RESULT DEVELOPMENT STABLE GROSS RESULT
Gross result (trailing 12 months)
2009 2010 2011 2012 2013 2014 Jun (YTD)
55.1 % 53.9 % 50.5 % 52.2 % 52.4 % 53.3 %
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CONSOLIDATED BALANCE SHEET JUNE 2014
in CHF mn 31.12.2013 30.06.2014 Δ
Cash and cash equivalents 1,028.3 526.8 - 501.5
Other current assets 1,559.6 1,862.3 + 302.7
Current assets 2,587.9 2,389.1 - 198.8
Non-current assets 2,144.1 2,194.3 + 50.2
Total assets 4,732.0 4,583.4 - 148.6
Current liabilities 1,189.1 997.6 - 191.5
Non-current liabilities 1,406.7 1,438.7 + 32.0
Equity incl. minorities 2,136.2 2,147.1 + 10.9
Total liabilities and equity 4,732.0 4,583.4 - 148.6
FIVE-YEAR OVERVIEW (HALF-YEAR FIGURES) NET SALES
in CHF mn
2'094
2'235
2'311
2'403
2'657
2010 2011 2012 2013 2014
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+ 10.6%
FIVE-YEAR OVERVIEW (HALF-YEAR FIGURES) EBIT in CHF mn
217
178
198
220
266
2010 2011 2012 2013 2014
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+ 21.0%
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FIVE YEAR OVERVIEW (HALF-YEAR FIGURES) NET PROFIT
in CHF mn
151
114
125
141
178
2010 2011 2012 2013 2014
+ 25.7%
ATTRACTIVE INDUSTRY AND MARKETS SIGNIFICANT GROWTH POTENTIAL
Market Volume 2018* > CHF 70 billion
Concrete
Water- proofing
Roofing
Flooring
Sealing & Bonding
Refurbish-ment
Industry Concrete
Water- proofing
Roofing
Flooring
Sealing & Bonding
Refurbish-ment
Industry
Market Volume 2013 CHF 60 billion
*3% annual market growth expected
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GROWING DEMAND FOR SIKA PRODUCTS URBANIZATION AND MEGACITIES
Increasing world population fuels construction markets
Higher demand for performance / specialty concrete
More waterproofing solutions needed
Functional sealing and building envelopes
Innovative roofing solutions
Increased safety, fire, water, earthquake and quality requirements
High demand for infrastructure
Increasing demand for refurbishment & repair solutions
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GROWING DEMAND FOR SIKA PRODUCTS TREND FOR LIGHTER, SAFER VEHICLES
New materials like carbon fiber require bonding solutions
Composite body structures need bonding instead of welding
Adhesives enable stiffer, lighter, safer metal structures
Modular production concepts are based on fast, high strength bonding systems
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GROWING DEMAND FOR SIKA PRODUCTS TREND FOR SUSTAINABILITY
More efficient use of limited natural resources and energy («green cities»)
Demand for longer life cycles of infrastructure and buildings
Demand for low-energy housing
Drive towards higher recyclability of materials
Demand for safe-to-use products, lower-emission products
New technologies for vehicles and transportation
Increasing environmental regulations
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FRAGMENTED GLOBAL INDUSTRY OFFERS SIGNIFICANT GROWTH POTENTIAL
Construction Chemical Market 2013 > CHF 50 billion
Sika
Others
Competitor 2
Competitor 1
Competitor 3
Competitor 4
Top 5 companies with 26% market share
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FOCUS ON 7 TARGET MARKETS
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With our core competencies bonding, sealing, damping, reinforcing and protecting
Sealing & Bonding Refurbishment Industry
Concrete Waterproofing Roofing Flooring
STRONG GLOBAL POSITION: COMPETITIVE ADVANTAGES FOR PROFITABLE GROWTH
World market leader in construction chemicals
Leading adhesive producer for industrial markets
Successful focus on innovation (73 patents in 2013)
First mover in emerging markets (38% of sales)
Global footprint with over 160 factories worldwide
Leading global brand
Entrepreneurial company culture
Solid financial position (A- rating)
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1. Market penetration - from roof to floor (cross selling, 7 target markets, KPM) - from new-build to refurbishment (life-cycle management) - push and pull market channels (specification, branding)
2. Global technology leadership with continuous innovations and economies of scale in core technologies
3. Accelerated build-up of emerging markets
4. Acquisitions to strengthen market access, technology, economies of scale
5. Strong company values with entrepreneurial spirit and high employee loyalty
STRATEGY 2018 SIKA’S GROWTH MODEL WILL DELIVER
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Annual sales growth of 6% to 8% (at constant exchange rates, including acquisitions)
Emerging markets with 42% to 45% of group sales by 2018
Operating profit (EBIT) above 10% of net sales
Operating free cash flow above 6% of net sales
ROCE above 20%
Maintain A- rating
STRATEGY 2018 TARGETS
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OUTLOOK 2014
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Sales growth expectations lifted from 6 – 8% to 9 – 11% (at constant exchange rates)
Continued build-up of growth markets with 8 new factories
Asia/Pacific: double-digit growth expected in China and Southeast Asia, stable volumes in Japan, Korea and Pacific
Latin America: double-digit growth expected overall but uncertainties in various markets
North America: after positive development of residential market in 2013, commercial and infrastructure markets are expected to improve, expect mid single-digit growth
EMEA: Continuation of slow recovery, double-digit growth in Middle East and Africa, high acquisition impact
Margins on 2013 level expected
This presentation contains certain forward-looking statements. These forward-looking statements may be identified by words such as ‘expects’, ‘believes’, ‘estimates’, ‘anticipates’, ‘projects’, ‘intends’, ‘should’, ‘seeks’, ‘future’ or similar expressions or by discussion of, among other things, strategy, goals, plans or intentions. Various factors may cause actual results to differ materially in the future from those reflected in forward-looking statements contained in this presentation, among others:
Fluctuations in currency exchange rates and general financial market conditions
Interruptions in production
Legislative and regulatory developments and economic conditions
Delay or inability in obtaining regulatory approvals or bringing products to market
Pricing and product initiatives of competitors
Uncertainties in the discovery, development or marketing of new products or new uses of existing products, including without limitation negative results of research projects, unexpected side-effects of pipeline or marketed products
Increased government pricing pressures
Loss of inability to obtain adequate protection for intellectual property rights
Litigation
Loss of key executives or other employees
Adverse publicity and news coverage.
Any statements regarding earnings per share growth is not a profit forecast and should not be interpreted to mean that Sika’s earnings or earnings per share for this year or any subsequent period will necessarily match or exceed the historical published earnings or earnings per share of Sika.
For marketed products discussed in this presentation, please see information on our website: www.sika.com
All mentioned trademarks are legally protected.
FORWARD-LOOKING STATEMENTS
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