Sika Announces New Multi-Component Business Strategy
By targeting the six pillars of market penetration, innovation, operational efficiency, acquisitions, strong corporate values, and sustainability, Sika plans to grow by 6-8% per year up to 2023.
At the recent 2019 Sika Capital Markets Day, CEO Paul Schuler presented the company’s new Strategy 2023, which reportedly builds on the current growth model. In addition to an increase in the long-term EBIT target, the main new elements of Strategy 2023 are the introduction of a new target market (“Building Finishing”); a focus on operational efficiency; and a targeted, group-wide emphasis on environmentally friendly products and sustainability.
“We are convinced that Strategy 2023 will enable us to raise Sika to the next level and to continue on the growth trajectory we have successfully pursued for many years,” said Schuler. “With our newly established eighth Target Market ‘Building Finishing’ we will be bundling our range of services and skills in the mortar technology field, thus focusing on the potential in this market. Increased focus on raising operational efficiency will help us improve our operating costs by 0.5 percentage points per year. On top of that, we want to make our product innovations even more sustainable while at the same time boosting product performance.”
By targeting the six pillars of market penetration, innovation, operational efficiency, acquisitions, strong corporate values, and sustainability, Sika plans to grow by 6-8% per year up to 2023. At the same time, it is aiming for a higher EBIT margin of 15-18% (compared to today’s 14-16%).
Sika reports that it will increasingly focus on sustainable product development. New products will create clear added value for customers, as well as being more sustainable; 25% of sales will be generated by products that are less than five years old.
An important driver for margin improvement will reportedly be increased operational efficiency. The group expects that projects in the areas of operations, logistics, procurement, and product formulation will result in an annual improvement in operating costs equivalent to 0.5% of sales.
According to Sika, sustainability is a key value and a central element of its corporate management. Sika currently offers a range of environmentally friendly product technologies, such as those for energy-efficient construction and environmentally friendly vehicles. In the future, Sika reports that its products will deliver better performance while also featuring enhanced environmental benefits as well. In addition, the group has set goals to reduce its annual energy and water consumption, as well as waste output. Sika’s overriding goal is to reduce CO2 emissions per ton manufactured by 12% until 2023.
For more information, visit www.sika.com.
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