Press Release: Sika AG : RECORD RESULTS FOR SALES, OPERATING PROFIT, AND NET PROFIT

Sika AG / Sika AG : RECORD RESULTS FOR SALES, OPERATING PROFIT, AND NET

PROFIT. Processed and transmitted by West Corporation. The issuer is

solely responsible for the content of this announcement.

-- Sales reach CHF 7,085.4 million (+13.6% in local currencies)

-- Operating profit (EBIT) increased to CHF 945.9 million (+5.5%)

-- Net profit up 5.9% to CHF 687.1 million

-- Growth in all regions

-- 11 factories opened, 1 national subsidiary established, 4 acquisitions

-- Dividend increase of 10.8% proposed

-- Strategic targets for 2020 confirmed

Sika continued its success story in the 2018 financial year with record

figures. Sales in local currencies increased by 13.6% to CHF 7,085.4

million. Operating profit (EBIT) rose by 5.5% to CHF 945.9 million

(previous year: CHF 896.3 million), while net profit grew by 5.9% to CHF

687.1 million (previous year: CHF 649.0 million). The 16 strategic

investments made during the year under review will continue to drive

future growth. The Board of Directors is proposing to the 2019 Annual

General Meeting a dividend increase of 10.8%. The strategic goals for

2020 were confirmed.

Paul Schuler, CEO: "We have shown proof of our strength and growth

capabilities now the takeover dispute has ended. 2018 was a historic

year for Sika, during which the course was set for further growth and

sustainable success. With sales reaching a record CHF 7,085.4 million

and an operating result of CHF 945.9 million, we can look back with

pride on the past financial year. We achieved further record results in

an economic environment that was at times challenging. We would like to

sincerely congratulate our 20,060 employees and thank them for their

hard work and tremendous dedication."

Growth in all regions

In 2018, Sika generated sales of CHF 3,167.3 million in the EMEA (Europe,

Middle East, Africa) region (previous year: CHF 2,735.7 million). This

translates into growth of 14.1% in local currencies. The core markets of

Spain and the UK recorded high single-digit growth, while double-digit

rates were achieved in Eastern Europe. In particular, the recently

founded national subsidiaries contributed to double-digit growth in

Africa. All Sika's target markets contributed to the good overall result

with high single-digit rates of organic growth.

Sales in the recently created Americas region grew by 11.7% in local

currencies to CHF 1,820.5 million (previous year: CHF 1,684.0 million).

Investment in the country's rapidly growing metropolitan areas was the

driving force behind double-digit growth in the United States. Business

performance in Brazil and Colombia was higher than average. The

organizational amalgamation of the two formerly separate North America

and Latin America regions to form the Americas region resulted in

improvements through various new initiatives in procurement, innovation,

talent development, and operations.

Sales in the Asia/Pacific region increased by 5.5% in local currencies

to CHF 1,177.2 million (previous year: CHF 1,121.4 million). The

region's organic growth during the fourth quarter of 2018 reached 7.5%,

the highest quarterly figure for the past three years. India, Indonesia,

and China recorded the strongest growth rates. The national subsidiary

established by Sika in Bangladesh in 2017 has already made a name for

itself as a leading supplier of high-performance system solutions in

major infrastructure projects such as expressways, railway lines, and

energy supply facilities.

In the new Global Business segment, Sika achieved growth in local

currencies of 29.2%. Total sales amounted to CHF 920.4 million (previous

year: CHF 707.2 million), of which 23.1% was attributable to the

acquisition of Faist ChemTec. This segment comprises the globally

managed automotive business as well as Advanced Resins (formerly Axson

Technologies) and Faist ChemTec, both established suppliers of

components and solutions to the automotive sector and other industries.

Overall, Sika gained additional market share in the automotive sector in

2018, while projects in hand for 2019 reached new record levels. The

company's product technologies for lightweight construction and

electromobility are among those that harbor strong growth potential,

alongside its comprehensive acoustic solutions for modern vehicle

construction. Sika is set to benefit substantially from the megatrend

toward electromobility and aims to increase its percentage of components

per vehicle by 20%.

Profit growth

Operating profit was affected by one-off expenses, as well as higher raw

material costs, which had a greater impact in 2018 than expected, even

though prices were adjusted continuously. Nevertheless operating profit

improved by 5.5% to CHF 945.9 million (previous year: CHF 896.3

million). Net profit rose by 5.9% to CHF 687.1 million (previous year:

CHF 649.0 million). The tax rate decreased to 23.0% (previous year:

24.7%).

Key balance sheet figures

The ratio of net working capital to net sales rose slightly in 2018 to

19.6% (previous year: 19.0%). This was due to a rise in the valuation of

inventories caused by increased raw material prices, as well as to

acquisitions. At the end of 2018, cash and cash equivalents amounted to

CHF 914.0 million (previous year: CHF 1,037.9 million), while operating

free cash flow grew slightly to CHF 513.2 million (previous year: CHF

496.8 million). Return on capital employed (ROCE) came to 26.2%

(previous year: 29.8%).

higher dividend proposed - New elections to the board of directors

At the Annual General Meeting on April 9, 2019, the Board of Directors

will be proposing a 10.8% increase in gross dividend to CHF 2.05 per

registered share (2018: CHF 1.85).

Furthermore the Board of Directors proposes the election of Thierry

Vanlancker (Netherlands) and Victor Balli (Switzerland) as new members

of the Board. Ulrich W. Suter is not standing for re-election.

Outlook

Sika expects sales to increase by 6-8% in 2019, in accordance with the

Group's 2020 growth strategy, and anticipates an over-proportional rise

in profits. Depending on when the Parex transaction is completed, sales

are expected to exceed CHF 8 billion. Implementation of the growth

strategy will continue in 2019 with the opening of seven to nine new

factories and further acquisitions. The new Strategy 2023 will be

presented at the Sika Capital Markets Day on October 3, 2019.

KEY FIGURES 2018

as % of as % of

In CHF mn net sales 2017 net sales 2018 Var. in %

Net sales 6,248.3 7,085.4 +13.4

Gross result 54.4 3,399.1 53.0 3,751.7 +10.4

Operating profit before

depreciation (EBITDA) 17.1 1,068.5 16.3 1,149.1 +7.6

Operating profit (EBIT) 14.3 896.3 13.4 945.9 +5.5

Net profit 10.4 649.0 9.7 687.1 +5.9

Net profit per share

(EPS) in CHF 4.23 4.69 +10.9

Operating free cash

flow 8.0 496.8 7.2 513.2 +3.3

Balance sheet total 5,795.8 6,382.2 +10.1

Shareholders' equity 3,411.1 1,675.4

Equity ratio in % 58.9 26.3

New working capital 19.0 1,187.4 19.6 1,389.8

ROCE in % 29.8 26.2

Number of employees 18,484 20,060 +8.5

The Annual Report and the presentation given at the media

conference/analyst presentation on the 2018 financial year can be

downloaded from www.sika.com.

Link to Annual Report:

https://www.sika.com/en/group/Publications/annual_reports01.html

Link to live transmission of the media conference/analyst presentation

of February 22, 2019, 10.00 a.m.:www.sika.com/presentations

FINANCIAL CALENDAR

Net sales first quarter 2019 Tuesday, April 9, 2019

51st Annual General Meeting Tuesday, April 9, 2019

Half-Year Report 2019 Thursday, July 25, 2019

Results first nine months 2019 Thursday, October 24, 2019

Net sales 2019 Tuesday, January 7, 2020

Media conference/analyst presentation Friday, February 21, 2020

on 2019 full-year results

CONTACT

Dominik Slappnig

Corporate Communications &

Investor Relations

+41 58 436 68 21

slappnig.dominik@ch.sika.com

SIKA CORPORATE PROFILE

Sika is a specialty chemicals company with a leading position in the

development and production of systems and products for bonding, sealing,

damping, reinforcing, and protecting in the building sector and motor

vehicle industry. Sika has subsidiaries in 101 countries around the

world and manufactures in over 200 factories. Its more than 20,000

employees generated annual sales of CHF 7.09 billion in 2018.

The media release can be downloaded from the following link:

Media Release: http://hugin.info/100359/R/2236074/880490.pdf

This announcement is distributed by West Corporation on behalf of West

Corporation clients.

The issuer of this announcement warrants that they are solely

responsible for the content, accuracy and originality of the information

contained therein.

Source: Sika AG via Globenewswire

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Sika AG

Zugerstrasse 50 Baar Switzerland

WKN: 858573;ISIN: CH0000587979;

http://www.sika.com

(END) Dow Jones Newswires

February 21, 2019 23:00 ET (04:00 GMT)