Construction chemicals Sika with jump in profits in the first half-year

The construction chemicals and adhesives manufacturer Sika has earned significantly more in the first half of the year. The previous forecast for the year as a whole has been confirmed.

As Sika announced on Tuesday, sales from January to June 2024 rose by 9.2 percent year-on-year to 5.83 billion Swiss francs. In local currencies, the increase amounted to 12.8 percent, almost all of which was attributable to acquisition effects (+12.3%). As is well known, Sika took over competitor MBCC in May 2023.

Negative currency effects still had a negative impact of 3.6% on the first half of the year (Q1 2024 -6.3%).

Significant increase in profitability

In terms of profitability, Sika was able to make significant gains - thanks in part to synergy effects from the MBCC takeover. Operating profit at EBITDA level rose by 24.0 percent to CHF 1.09 billion. The corresponding margin reached 18.7 percent (previous year 16.5%).

At the bottom line, Sika recorded an even greater leap. Net profit rose by 40.1 percent to CHF 577.1 million. This clearly exceeded the expectations of the analysts surveyed by AWP.

With the "good" operating result, Sika has proven that the company can gain market share even under difficult conditions, Sika CEO Thomas Hasler is quoted as saying in the press release. The integration of MBCC has enabled the company to benefit from an expanded product portfolio and improved market access.

Growth in all regions

Sika has grown in all three of its market regions, albeit with certain differences. Growth in local currencies was strongest in the Americas region (+15.1%), followed by Europe, Middle East and Africa (EMEA +13.5%), while in Asia "only" an increase of 8.0 percent was achieved.

In Europe, increasing price stability, robust employment figures, a stabilization of purchasing power due to the recovery of real wages and a trend towards lower interest rates pointed to an economic recovery in the region, as Sika further explained.

In the Americas region, on the other hand, the USA has recorded continuous economic growth in the year to date. Government-sponsored infrastructure projects and projects in connection with the relocation of production facilities to the USA have additionally supported the positive development, it said.

Finally, in China Sika achieved moderate growth in the distribution business despite a declining market, while the project business declined significantly. Southeast Asia, on the other hand, gained momentum over the course of the year with high single-digit growth, according to the Group.

Targets confirmed

Looking to the future, Sika is confident that it can continue to successfully implement its own strategy. Accordingly, the forecasts for the current year are confirmed.

The company is aiming for sales growth in local currencies of 6 to 9 percent and a disproportionately high increase in earnings before interest, taxes, depreciation and amortization (EBITDA).