Nine months later, sales increased by almost 17 percent to CHF 8.0 billion, Sika said on Friday. The acquisition effect was 3.4 percent. Considering the negative exchange rate effect, this resulted in an organic growth of 15.1 percent in the reporting period.
However, the growth rate slowed somewhat in the third quarter. Six months later, the difference was still 18 percent compared to the previous year’s sales.
Still, CEO Thomas Hasler was pleased with what has been achieved: “In the first nine months of the current fiscal year, we achieved convincing business results under continued challenging framework conditions,” he said in a press release.
All regions are growing at double-digit rates
Geographically, sales in all Sika regions grew organically by double digits. In the EMEA region (Europe, Middle East, Africa), which is the most important region with a sales share of 40 percent, the company grew the least with a good 11 percent growth rate.
Here, the distribution business has even fallen over the past two quarters, as has the project business, with product sales through DIY stores, builders and online platforms. But the latter has proven more robust, thanks to economic stimulus programs and new investments in the energy sector. On the other hand, strong growth was experienced again in Africa and the Middle East.
Strong growth was also reflected in another profit increase. The sharp increase in raw material costs caused the gross margin to drop to just under 50 percent. However, thanks to higher volumes, price increases and efficiency improvements, operating profit (EBIT) increased by almost 17 percent to a new record of CHF 1.23 billion, while the corresponding margin remained flat at 15.4 percent.
Operating profit includes 168 million Swiss franc gains from the sale of the European industrial sealing business and the cost of the proposed MBCC acquisition of approximately 39 million Swiss francs.
At the same time, net income increased by almost 16 percent to CHF 885.9 million. Sika thus largely met analysts’ expectations in terms of sales, but missed them in terms of profits.
Estimate confirmed
Only the 2022 overall growth forecasts, which were raised on Capital Markets Day in early October, are being confirmed. Sales growth of over 15 percent and a disproportionate increase in EBIT are expected in local currencies. For the first time, sales for the year as a whole should exceed 10 billion.
At the same time, the company confirmed its medium-term targets for “Strategy 2023”. Accordingly, sales need to grow by 6 to 8 percent annually and the EBIT margin should be in the range of 15 to 18 percent.
(SDA)