Sika (SIKA) Investor Update summary

Strategic outlook and growth guidance

• Strategy 2028 execution is on track, focusing on outperforming markets and peers despite challenging conditions in core regions like Europe and North America.

• Annual growth guidance in local currencies is set at 3%-6%, with a profitability commitment of 20%-23% EBITDA margin starting in 2026 and operating free cash flow above 10%.

• Growth levers include market penetration, innovation, sustainability, acquisitions, and people & culture.

• Key growth hotspots are Southeast Asia, India, Middle East, Africa, and Latin America, while mature markets face more headwinds.

• Infrastructure and data center segments remain resilient and offer significant opportunities.

Market environment and performance

• Core markets face headwinds from elevated borrowing costs, construction cost increases, and economic uncertainty, but infrastructure investment and refurbishment provide stability.

• Market backlog is growing, with significant investments in infrastructure and climate neutrality planned in Europe and the US.

• Net sales growth for the first nine months of 2025 was impacted by China construction, but organic growth excluding China remains positive.

• Consistent outperformance of peers in both organic growth and EBITDA, especially when excluding China construction.

• Innovation drives 23%-25% of net sales with products less than five years old, supported by 5% of workforce in R&D.

China strategy and market adaptation

• China contributes about 10% of group sales, with a broad product portfolio and strong distribution network (280,000 points of sale).

• Residential construction downturn has led to a >70% decline in housing starts, but the business remains profitable by focusing on high-value applications and expanding into tier 2/3 cities.

• Industrial and infrastructure construction in China show attractive potential, with policy support expected to drive recovery and refurbishment demand rising.

• Production footprint consolidation aims to reduce sites from over 30 to 25 by 2027, increasing efficiency and automation.

• Strategic importance of China extends to supporting Chinese contractors and manufacturers in global expansion and benefiting from electromobility trends.