Sika Achieves Record Sales in First Nine Months of 2019
Sika reports that the implementation of the group’s growth strategy will continue in 2019 with the opening of between seven and nine new factories.
In the first nine months of 2019, Sika reported high growth and a new sales record of CHF 6 billion (approximately $6 billion). This equates to an increase of 15.1% in local currencies; the acquisition effect accounted for 11% and organic growth 4.1%. Sales growth in CHF amounted to 12.9% (-2.2% currency effect).
“Following strong sales growth of 15.1% and a solid organic growth in the third quarter, we are confident that we will exceed our sales target for fiscal 2019 of CHF 8 billion,” said Paul Schuler, CEO. “Particularly pleasing is the strong operating free cash-flow that we were able to achieve in the first nine months. The integration of Parex and the realization of our shared business potential is proceeding very successfully and at a good pace. Thanks to our recently announced Strategy 2023 we are pointing our already powerful organization to the next level, and will be implementing further initiatives to drive growth momentum, sustainability, and operational efficiency.”
In the EMEA region (Europe, Middle East, Africa), Sika reported a sales increase in local currency of 10.8% for the first nine months. This region recorded strong growth with double-digit growth rates in Africa and high-single-digit growth in Eastern Europe. In Belarus, Sika acquired Belineco, a specialist producer of polyurethane foam systems. Production capacity was expanded in Senegal, Egypt, Qatar, Serbia, and Cameroon, with new factories opened for the production of concrete admixtures and mortar.
The Americas region recorded sales growth of 18.1%. Growth accelerated in North America despite the ongoing shortage of skilled labor in the construction sector. Latin America reported healthy growth. Business development was above-average in Brazil, Colombia, and Peru. In Mexico, the repercussions of the change in government were noticeable in the implementation of infrastructure projects. In Canada, Sika acquired King Packaged Materials, a leader in concrete repair systems.
Growth in the Asia-Pacific region amounted to 31.1%, including the acquisition effect of the Parex takeover. The highest growth rates in Asia-Pacific were recorded in the Philippines, India, and China. In China, Sika took over Crevo-Hengxin, a manufacturer of silicon-based sealants and adhesives.
The Global Business segment recorded a growth rate of 3.6%. Sika generated further growth in the automotive area in the first nine months of the year, despite a significant decline in the production figures of automotive manufacturers around the world. The megatrends in modern automotive construction, which are dominated by electro-mobility and lightweight construction, are reportedly opening up new avenues of long-term growth potential for Sika thanks to new, lighter platforms with multi-material designs and new adhesive technologies, as well as heat management in modern battery technologies for electric vehicles.
For the 2019 financial year, Sika is expecting an increase in sales to more than CHF 8 billion (~ $8 billion), along with double-digit EBIT growth. Sika reports that the implementation of the group’s growth strategy will continue in 2019 with the opening of between seven and nine new factories. Activities to establish further growth platforms in the form of company acquisitions are continuously being pursued.
Additional details are available at www.sika.com.