Sika (SIKA) Q2 2024 earnings summary

Executive summary

• Achieved record net sales of CHF 5,834.8 million, up 12.8% in local currencies and 9.2% in CHF year-over-year, with strong market share gains across all regions despite challenging conditions.

• Material margin expanded to 55.1% (up from 52.7%), and EBITDA margin rose to 18.7% (up from 16.5%), driven by procurement initiatives and MBCC synergies.

• EBITDA increased 24% to CHF 1,093 million, and net profit grew over 40% to CHF 577.1 million, with basic EPS up to CHF 3.59.

• Integration of MBCC progressing ahead of plan, with synergy guidance raised to CHF 100–120 million for 2024; acquisition of Kwik Bond Polymers in the US further strengthened the portfolio.

• SBTi validated net-zero roadmap, and employee engagement rate reached 86%.

Financial highlights

• Organic growth was 0.5% in H1; acquisitions (mainly MBCC and Kwik Bond) contributed 12.3% to growth.

• Operating free cash flow reached a record CHF 401.3 million, up 24.4% year-over-year.

• Depreciation and amortization rose to CHF 271 million, mainly due to MBCC; net interest expense increased by CHF 36.7 million, linked to MBCC acquisition financing.

• Group tax rate decreased to 22.4% from 27.2%, aided by higher deductibility and favorable profit mix.

• Shareholders’ equity rose to CHF 6,425.2 million, with an equity ratio of 39.8%; market capitalization as of June 30, 2024, was CHF 41,275 million.

Outlook and guidance

• Reconfirmed full-year outlook for 6–9% sales growth in local currencies and further over-proportional EBITDA expansion.

• 2028 strategic targets reaffirmed: 6–9% annual sales growth in local currencies, 20–23% EBITDA margin (post-MBCC synergies), >10% operating free cash flow as % of net sales, and 20–25% ROCE.

• Confident in further market share gains and positive momentum into H2, with strategic focus on infrastructure and high-growth regions.

• Strategy emphasizes sustainable, profitable growth, innovation, and decarbonization.