Sika recently announced its financial results for the first six months of 2019. The group recorded single-digit sales growth in the first half of the year, posting a new sales record of over CHF 3.7 billion (approximately $3.73 billion). This equates to an increase of 9.6% in local currencies; sales growth in CHF amounted to 7.6% (- 2% currency effect).
“We are well-positioned in a commercially challenging environment, and achieved a strong sales growth of 9.6% in the first half of 2019,” said Paul Schuler, CEO. “We are enjoying a significant boost to growth thanks to the Parex acquisition, and are well on track to exceed the sales mark of CHF 8 billion [~ $8.1 billion]. Our collaboration during the integration process is working outstandingly, and we are exploiting our synergy potential in procurement, logistics, and production. Our joint distribution and cross-selling activities are already revealing the strength of our combined market presence.”
The first half of the year saw Sika make the largest acquisition in its history with the takeover of Parex, a globally leading producer of facade mortar, technical mortar, tile adhesives, and waterproofing systems. The company reportedly has a strong presence in distribution channels and is represented in 23 countries. According to Sika, the integration is proceeding successfully according to plan, and numerous projects are already being implemented.
The Europe, Middle East, Africa (EMEA) region reported a sales increase in local currency of 7.7% in the 2019 first half. This region recorded double-digit growth rates in Africa and high-single-digit growth in Eastern Europe. Growth in many major European markets developed moderately, due to the lower number of working days in the second quarter.
In Belarus, Sika acquired Belineco, a specialist manufacturer of polyurethane foam systems, thereby expanding its know-how in the development and production of PU foams. Production capacity was expanded in Senegal, Egypt, and Qatar, with new factories opened for the production of concrete admixtures and mortar.
The Americas region recorded a strong sales increase of 11.4% for the 2019 first half. Growth has been accelerating in North America, in spite of the ongoing shortage of specialist labor in the construction sector. Latin America recorded high growth, with above-average business development in Brazil, Colombia, and Peru. In Mexico, the repercussions of the change in government were tangible in the implementation of infrastructure projects. In Canada, the acquisition of the King Packaged Materials Co. in the reporting period brought a leading manufacturer of concrete repair systems into the group.
Growth for the first half of 2019 in the Asia-Pacific region amounted to 15.6%, with the highest growth rates recorded by India and China. In order to mitigate the economic impact of the trade tariff conflict with the U.S., the Chinese government increased its expenditure on infrastructure projects.
The Global Business segment recorded a growth rate of 4.9% in the 2019 first half. In the Automotive area, Sika generated further growth in the first half of the year, despite a strong decline in global car production figures. In particular, the company is benefiting from the megatrends evident in modern automotive construction, which are dominated by electro-mobility and lightweight construction. New, lighter platforms and multi-material designs are opening up new avenues of growth potential for Sika.
For the full 2019 financial year, Sika reports that it is expecting an increase in sales to more than CHF 8 billion. The implementation of the group's growth strategy will reportedly continue in 2019, with the opening of between seven and nine new factories, as well as the establishment of further growth platforms in the form of acquisitions.
Additional details are available at www.sika.com.