SIKA launches new growth strategy

SIKA launches new growth strategy
03 October 2023

At today's Capital Markets Day in Zurich, Sika will presents its new Strategy 2028, “Beyond the Expected”, which the company says builds on the company’s successful growth model. “The roadmap leverages on Sika’s strong market position and innovation power and sets the course for an even stronger performance in the years to come,” the company said in a statement.

The annual growth target will be lifted to 6-9 per cent in local currencies and profitability target will be increased to an EBITDA margin of 20-23 per cent. The new growth strategy is based on the four pillars market penetration, innovation and sustainability, acquisitions, as well as people and culture and includes a balanced set of financial and non-financial targets. Furthermore, Sika reports a strong sales growth year to date (January to August 2023) of +12.2 per cent.

Thomas Hasler, CEO, stated: “Beyond the Expected – that’s what Sika stands for both now and in the future. We have a proven track-record of delivering outstanding performance and additional value for all our stakeholders. With our new Strategy 2028 we are perfectly positioned to continue our successful path of sustainable profitable growth. Our ambitions for the next years build upon our strengths – our deeply rooted values, our performance-oriented culture and particularly the dedicated Sika teams around the globe. With this new strategy we want to inspire and motivate our people to help drive the transformation towards a more sustainable future, to the benefit of our customers and generations to come.”

On growth, the company intends to boost sales by 6-9 per cent per year (target until 2023 was 6-8 per cent) in local currencies until 2028, despite a volatile short-term market environment.

Profitability will be increased to 20-23 per cent EBITDA margin (close to 19 per cent in 2022), mainly by enhanced leverage, operational efficiency, and improving material margins. To further underline the importance of acquisitions for the group, Sika has changed to EBITDA as the key performance indicator in the new strategy. The reason being that it excludes distortion from intangible asset amortisation, and thus gives a more concise picture of the actual local business performance.

In addition, Sika maintains its objective of an operating free cashflow above 10 per cent of net sales. It will continue to strive for a return on capital employed of 20-25 per cent.

In terms of the company's focus on sustainability, by 2028, Sika aims to reduce absolute scope 1 and 2 emissions by 20 per cent compared to 2022. Sika also strives to decrease emissions through its value chain – scope 3 – in line with its net-zero-pledge by 2050. In addition, the company is committed to save natural resources and reduce the waste volumes disposed and the water discharged per ton sold by 15 per cent until 2028 compared to the base year 2023.

Published under Cement News

Tagged Under: Sika Switzerland