Sika Boosts Sales and Profit

Sika AG / Sika Boosts Sales and Profit Processed and transmitted by Thomson Reuters. The issuer is solely responsible for the content of this announcement. Sika increased sales in the first nine months of the year in local currencies by 8.7%. Consolidated net profit rose in this period by 24.7% to CHF 249.2 million. Business has been driven primarily by strong demand in emerging markets. In addition, sales of products for industry have also advanced measurably. Sales Sika's markets showed varying development during the first nine months of the year. While European and North American markets were still volatile, development in Asia, Latin America and IMEA (India, Middle East and Africa) was strong. Total sales rose in comparison with the prior year period by 5.9% from CHF 3 132.6 million to CHF 3 318.6 million. Included in this growth are acquisitions in the amount of 3.4% as well as a negative currency translation effect of 2.8%. Segments In the first nine months of the year Sika grew in local currencies in all Regions. While growth in more mature markets such as Europe North (3.6%), Europe South (1.6%) and North America (5.6%) turned out to be lower, the emerging markets of IMEA (9.7%), Latin America (17.9%) and Asia/Pacific (37.0%) advanced clearly. Sales of products for the building and construction industry rose overall by 4.1%, while the increase among products for industrial manufacturing amounted to 14.3%. Profit Development Gross profit as a proportion of sales stood at 54.7%, declining slightly in comparison with the previous year, mainly due to increased raw material prices. In consequence of acquisitions, costs rose by 3.2%. Despite expansion necessary in the emerging markets, cost efficiency could be improved from 41.6% to 40.6%. The restructuring measures initiated in 2009 are proceeding according to plan. Operating profit (EBIT) amounted to CHF 368.7 million, signifying an improvement of 23.3% in comparison with the previous year. This increase amounts to 14.6% upon absorption of the 2009 costs of restructuring. The EBIT margin reached 11.1% (prior year 9.5%). The consolidated net profit of CHF 249.2 million showed an increase of 24.7%. Outlook Sika anticipates that the strong market development in the emerging markets in building and construction as well as in industry will continue. Mature markets in Europe and North America however remain difficult to predict, foremost in the building and construction industry. In particular it is not foreseeable how the austerity programs announced by various countries will affect construction activity. Sika is well positioned in these markets and will continue to exploit rigorously occurring opportunities to increase market share. The company expects a continuation of the positive trend in the area of industry. Sika has secured a number of new projects with product innovations, which will effect sales development advantageously. Due to continually rising raw material prices, gross profit will remain under pressure also during the fourth quarter. Nevertheless for the entire year of 2010 a decidedly higher net profit is anticipated in comparison with the previous year. Income statement % 1/1/2009 - % 1/1/2010 - Change in CHF mn  9/30/2009 9/30/2010 in % -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Net sales 100.0 3 132.6 100.0 3 318.6 5.9 -------------------------------------------------------------------------------- Other operating income 0.2 4.7 0.1 4.2 -------------------------------------------------------------------------------- Changes in inventory -0.1 -1.9 0.5 17.0 -------------------------------------------------------------------------------- Operating revenue 100.1 3 135.4 100.6 3 339.8 6.5 -------------------------------------------------------------------------------- Material expenses -45.0 -1 410.1 -45.9 -1 523.3 -------------------------------------------------------------------------------- Gross result 55.1 1 725.3 54.7 1 816.5 5.3 -------------------------------------------------------------------------------- Personnel expenses -22.8 -714.4 -21.5 -711.9 -------------------------------------------------------------------------------- Other operating expenses -18.8 -589.8 -19.1 -634.3 -------------------------------------------------------------------------------- Operating profit before depre-ciation and restructuring 13.4 421.1 14.2 470.3 11.7 -------------------------------------------------------------------------------- Depreciation -2.5 -77.1 -2.3 -76.9 -------------------------------------------------------------------------------- Amortization -0.7 -22.2 -0.7 -24.7 -------------------------------------------------------------------------------- Operating profit before restructuring 10.3 321.8 11.1 368.7 14.6 -------------------------------------------------------------------------------- Restructuring -0.7 -22.7 0.0 0.0 -------------------------------------------------------------------------------- Operating profit (EBIT) 9.5 299.1 11.1 368.7 23.3 -------------------------------------------------------------------------------- Interest income 0.1 1.9 0.1 2.5 -------------------------------------------------------------------------------- Interest expenses -0.6 -19.7 -0.7 -23.5 -------------------------------------------------------------------------------- Other financial income 0.0 0.4 0.1 4.0 -------------------------------------------------------------------------------- Other financial expenses -0.2 -7.3 -0.3 -9.8 -------------------------------------------------------------------------------- Income from participations 0.2 5.6 0.1 3.9 -------------------------------------------------------------------------------- Net profit before taxes 8.9 280.0 10.4 345.8 23.5 -------------------------------------------------------------------------------- Income taxes -2.6 -80.1 -2.9 -96.6 -------------------------------------------------------------------------------- Net profit 6.4 199.9 7.5 249.2 24.7 -------------------------------------------------------------------------------- Profit attributable to Sika shareholders 6.4 199.9 7.5 248.9 -------------------------------------------------------------------------------- Profit attributable to minority interests 0.0 0.0 0.0 0.3 -------------------------------------------------------------------------------- Net sales in the first nine months 1/1/2009 - 1/1/2010 - Change compared to prior year in CHF mn 9/30/2009 9/30/2010 (+/- in %) -------------------------------------------------------------------------------- In Swiss In local Currency       francs currencies[2] impact -------------------------------------------------------------------------------- By region -------------------------------------------------------------------------------- Europe North 1 121.0 1 111.3 -0.9 3.6 -4.5 -------------------------------------------------------------------------------- Europe South 719.0 680.7 -5.3 1.6 -6.9 -------------------------------------------------------------------------------- IMEA[1] 197.0 216.5 9.9 9.7 0.2 -------------------------------------------------------------------------------- North America 460.1 473.1 2.8 5.6 -2.8 -------------------------------------------------------------------------------- Latin America 288.2 356.0 23.5 17.9 5.6 -------------------------------------------------------------------------------- Asia/Pacific 339.0 473.8 39.8 37.0 2.8 -------------------------------------------------------------------------------- Central Services 8.3 7.2 -13.3 -13.3 0.0 -------------------------------------------------------------------------------- Consolidated net sales 3 132.6 3 318.6 5.9 8.7 -2.8 -------------------------------------------------------------------------------- Products for construction industry 2 557.9 2 661.8 4.1 6.6 -2.5 -------------------------------------------------------------------------------- Products for industrial manufacturing 574.7 656.8 14.3 17.9 -3.6 -------------------------------------------------------------------------------- [1] India, Middle East, Africa (IMEA) [2] including acquisitions Sika AG Contact: Dominik Slappnig, Zugerstrasse 50 Corporate Communications & Investor Relations CH-6341 Baar, Switzerland Tel.: +41 58 436 68 21 www.sika.com Fax: +41 58 436 68 50 slappnig.dominik@ch.sika.com Sika AG Corporate Profile Sika AG, located in Baar, Switzerland, is a globally active specialty chemicals company. Sika supplies the building and construction as well as the manufacturing industries (vehicle, appliance and building component production). Sika is a leader in processing materials used in sealing, bonding, damping, reinforcing and protecting load-bearing structures. Sika's product range features high-quality concrete admixtures, specialty mortars, sealants and adhesives, damping and reinforcing materials, structural strengthening systems, industrial flooring as well as roofing and waterproofing systems. Subsidiaries in more than 70 countries worldwide and approximately 12 500 employees link customers directly to Sika and ensure the success of all our partners. Sika achieves annual sales of CHF 4.2 billion. Visit our website atwww.sika.com. The media release can be downloaded from the following link: [HUG#1459233] --- End of Message --- Sika AG Zugerstrasse 50 Baar null WKN: 858573;ISIN: CH0000587979; Shareholder letter 9 months 2010: http://hugin.info/100359/R/1459233/398711.pdf Media Release: http://hugin.info/100359/R/1459233/398710.pdf This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Sika AG via Thomson Reuters ONE