Sika Posts Record Global Sales of 17.1% Growth in 2021

SIKA SALES rose to a record CHF (Swiss Franc) 9.24 billion, with organic growth of 15.1% despite the persistent challenges of 2021, including the pandemic and raw materials bottlenecks.

This corresponds to Sika sales growth of 17.1% in local currencies, with a currency effect of 0.2% and an acquisition effect of 2.0%. Compared with the same period in 2019, the organic gain was 11.9%.

Thomas Hasler, Sika CEO said: “2021 was expected to be a challenging year and it proved to be a very successful one for Sika. We are benefiting from a number of growth platforms and are in an ideal position to achieve long-term success.

“We have solutions in place for all the development stages of construction markets, and government supported investment programs running into the billions will provide further impetus for our business. In addition, we are making targeted use of the megatrends that drive our key markets. There is huge demand for sustainable solutions.”

MBCC Acquisition

In November 2021, Sika signed a binding agreement to acquire MBCC Group (the former BASF Construction Chemicals). With sales of CHF 2.9 billion, MBCC Group is a supplier of construction chemicals worldwide. The company says this acquisition will complement and broaden Sika’s product and solutions offering in four of five core technologies and seven of eight Sika Target Markets, while further strengthening the company’s geographic footprint.

The market for construction chemical products and solutions is set to grow to around CHF 80 billion by 2023 and, as it is heavily fragmented, Sika says it will continue to offer substantial growth opportunities even after the MBCC acquisition.

MBCC generates around 53% of its sales in the construction systems sector and the remaining 47% in the concrete admixtures segment. The acquisition is subject to regulatory approval. Sika is confident it will obtain all required approvals and the closing of the acquisition is targeted for the second half of 2022.

2021 Market Share Gains

Sika sales grew more strongly than the market in all regions in 2021. Distribution business also posted significant gains in all regions.

The EMEA region (Europe, Middle East, Africa) sales increased in local currencies by 16.1% (previous year: 4.4%). As in 2020, growth in distribution and refurbishment business outstripped growth in the other business segments. Nearly all countries in the region achieved double-digit growth rates. The countries in the Middle East, along with Eastern Europe including Russia, the UK, as well as the countries in Africa benefited from a boost in growth. In general, purchases of Sika product solutions via e-commerce platforms saw an above-average increase.

In the period under review, Sika acquired Kreps LLC, a leading manufacturer of mortar products in Russia, thereby further expanding both its existing product portfolio and its geographic presence.

The Americas region recorded growth in local currencies of 21.0% (previous year: 1.0%). In the USA, Sika growth was driven primarily by large-scale refurbishment projects and new-build projects in the area of distribution and data centers. Strong growth rates were achieved in particular in Mexico, Colombia, Brazil, Peru, and Chile. In the Americas region the strategic focus of business activities on big cities and metropolitan areas again paid off, as did the concentration on major infrastructure projects and the targeted realization of cross-selling potential.

American Acquisitions

Last year, Sika also acquired DriTac, a US-based company with a strong market position in the area of wood floor bonding. In addition, a manufacturer of mortar products in Brazil was brought into the Sika Group in the form of BR Massa. Thanks to this acquisition, Sika improved its position in one of the leading economic regions of Brazil, as well as expanding its production capacity.

In July, the company acquired American Hydrotech Inc. in the USA and its Canadian subsidiary Hydrotech Membrane Corporation. Hydrotech is a manufacturer of liquid membranes and offers solutions for roofing and waterproofing.

Sika also acquired the family-run company Bexel Internacional S.A. de C.V., a manufacturer of tile adhesives and stuccos in Mexico. With this acquisition, Sika is expanding its position in the rapidly growing Mexican market for mortar products and is significantly increasing its production capacity with five strategically positioned production facilities.

Sales in local currencies in the Asia/Pacific region increased by 19.4% (previous year: 12.6%). Last year, China in particular benefited from the ongoing strong growth momentum with double-digit organic growth rates and successfully expanded its infrastructure and distribution business. India continued to see a dynamic development, while the countries in Southeast Asia recovered slowly from the severe lockdowns in the last quarter of the year. The trend in Japan remains challenging. Investment activity in the country’s construction market is still subdued.

During the period under review, Sika acquired Hamatite, the adhesives division of Yokohama Rubber Co., Ltd. Hamatite is a Japanese manufacturer offering adhesives and sealants for the automotive and construction industries. The acquisition gives Sika a broader range of sealants and adhesives for the Japanese construction sector.

In China, Sika acquired Shenzhen Landun Holding Co., Ltd., a manufacturer of a range of waterproofing products and technologies . The company operates two production facilities that manufacture a range of membranes and coatings for waterproofing applications, mainly supplying infrastructure and commercial projects.

In the Global Business segment, Sika achieved growth in local currencies of 4.3% (previous year: –11.4%).

Sika Sales Outlook

Sika is seeking to grow by 6%–8% a year in local currencies up to 2023. The company is confirming its 2023 strategic targets with its focus on six strategic pillars – market penetration, innovation, operational efficiency, acquisitions, strong corporate values, and sustainability.

As of 2021, the company is aiming for a higher EBIT margin of 15%–18%. Projects in the areas of operations, logistics, procurement, and product formulation should result in an annual improvement in operating costs equivalent to 0.5% of sales.

For the 2021 fiscal year, Sika is anticipating an over-proportional increase in EBIT and an EBIT margin of 15%.

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