Sika sees successful start to the year

Sika has reported a successful start to 2019 business year, reporting a new sales record of CHF1644.8m (EUR1462m) in the first quarter. This equates to an increase of 7.1 per cent in local currencies. A negative currency effect (-1.3 per cent) led to robust sales growth in Swiss francs of 5.8 per cent.

Paul Schuler, Chief Executive Officer: “In a commercially challenging environment we have delivered sales growth of 7.1 per cent, which represents a strong start to the new business year. The acquisition of Parex, which is expected to complete in the second quarter, will provide us with a first-class growth platform. Our organisation is set up for the next level of growth, and we anticipate sales to exceed CHF8bn for the first time in 2019 as a whole.”

Growth in all regions
In the first quarter of 2019, sales in the EMEA region (Europe, Middle East, Africa) increased by 8.2 per cent (previous year: 10.2 per cent). The company reported that business developed well in Germany, Austria, and Switzerland (DACH area). The countries of Eastern Europe and Africa posted double-digit growth rates. In Africa, the new national subsidiaries in particular significantly contributed to the strong growth.

At the start of 2019, Sika announced the acquisition of Belineco, a polyurethane foam systems manufacturer based in Belarus. The takeover will further improve access to the East European market. In addition, Sika has invested in a mortar production facility in Senegal.

The Americas region recorded growth of 4.8 per cent (previous year: 12.2 per cent). Numerous major construction projects have been delayed in the United States due to the ongoing shortage of skilled labor. In Mexico, the change in government has led to noticeable cost-cutting measures in the area of infrastructure. Business development in Brazil and Colombia was higher than average. In Canada, the acquisition of the King Packaged Materials Company in the reporting period brought a leading manufacturer of concrete repair systems into the Group.

Sales in the Asia/Pacific region rose by 2.8 per cent (previous year: 3.9 per cent). Double-digit growth rates were reported in two of the largest economies of Asia, namely China and India. By contrast, growth in the countries of Southeast Asia and the Pacific area was uneven, and in some cases even negative, SIka noted.

The Global Business segment recorded growth of 13.3 per cent (previous year: 20.9 per cent), 11.3 per centbeing attributed to acquisitions. In the Automotive area, Sika was further able to increase its market share in the first quarter and grow organically, despite the decline in car production figures worldwide. In particular, Sika is benefiting from the megatrends evident in modern automotive construction, which are dominated by electromobility and lightweight construction. New platforms and multi-material designs are opening up new avenues of growth potential for Sika.

Outlook: sales target of CHF8bn in 2019
Sika expects sales to increase by 6-8 per cent in 2019, in accordance with the Group’s Strategic Targets 2020, and anticipates an over-proportional rise in profits. With the consolidation of Parex tentatively taking place in the second quarter, sales is set to exceed CHF8bn for the first time. The implementation of the Group's growth strategy will continue in 2019 with the opening of between seven and nine new factories, and the establishment of further growth platforms in the form of acquisitions.