Sika News 2018

A cross-functional group of customer-facing Sika Roofing employees completed an intensive, technically-driven training course developed by the Institute of Roofing (IoR) in partnership with the manufacturer.

Sika has agreed to acquire Arcon Membrane Srl, a leading manufacturer of roofing and waterproofing systems in Romania. By acquiring Arcon, Sika will significantly strengthen its position in the Romanian market and extend its product portfolio to meet the increasing demand for complete solutions in the roofing and waterproofing markets. The acquired business generates annual sales of CHF 23 million. The transaction is subject to approval by the Romanian anti-trust authority.

Sika has opened a new production plant in Central America, located in Palin in the metropolitan area of Guatemala City. This move further expands the company's market position in the emerging countries of the region. The portfolio of locally manufactured products includes concrete admixtures, mortars, and liquid applied membranes, which will be used to supply the neighboring countries of Honduras and El Salvador as well as the domestic market.

Sika Peru has opened new headquarters in the metropolitan area of Lima and introduced a modern plant for the production of concrete admixtures, mortar products, and acrylic liquid applied membranes (LAM). With this new plant, Sika is tripling its production capacities and strengthening its market position in Peru.

Sika has acquired the global Concrete Fibers business from Propex Holding, LLC, which includes a US plant manufacturing synthetic fibers for use in concrete reinforcement, sales operations in Sika’s three geographical regions, and a strong brand. The acquired business is a perfect addition to Sika’s concrete systems for high value-added solutions required in the construction of high-rise buildings and demanding infrastructure projects. The acquired business generates annual sales of CHF 30 million.

▪ Sales growth of 14.1% in local currency (15.0% in CHF) to CHF 5,322.7 million
▪ Growth in all regions
▪ Operating profit (EBIT) up 9.0% (excluding one-off costs incurred in connection with the resolution of the dispute with Saint-Gobain, EBIT would have risen by 12.4%)
▪ Double-digit increase in net profit of 10.5%
▪ Consistent implementation of growth strategy with establishment of a further national subsidiary, the opening of six new factories, and completion of three acquisitions
▪ Outlook 2018: Confirmation of sales target of more than CHF 7 billion ̶ double-digit growth in both EBIT and net profit

Sika opens a new production plant for concrete admixtures near Yekaterinburg, Russia. In the area around the plant, there are five cities with populations of over one million and attractive construction markets. Large parts of the Volga region and Siberia can also be supplied from the new site.

Sika is expanding its presence in Kazakhstan and strengthening its position in two of the country's growth regions. To reinforce existing production operations in Almaty in the southeast of the country, Sika is simultaneously commissioning two further concrete admixture production plants, one in the capital Astana and the other in Atyrau in the west.

At the Sika Capital Markets Day, currently taking place in New York, Sika CEO Paul Schuler confirmed the strategic goals for 2020. Citing the motto "Megacities drive Sika’s growth", Group Management members and Sika experts from the United States used the example of New York to illustrate how the urbanization megatrend and the strongly growing large cities are driving Sika's structural growth. In the USA, Sika already generates 37% of its sales in the 20 biggest cities, with New York as one of the leading markets.

Sika is adding strength and capacity to its Mexican product supply chain in the Automotive sector with the opening of a new manufacturing facility in Querétaro, Mexico. The new factory, which includes an integrated logistics center, will manufacture and locally supply Sika’s full range of acoustic treatments and body structural products for the growing number of Original Equipment Manufacturer (OEM) assembly and component makers located in the country. The Mexican subsidiary of Faist ChemTec, acquired by Sika at the start of 2018, will also be integrated into the new facility.

The natural beauty of the North Pennines provided a stunning and challenging backdrop for more than 180 cyclists taking part in an endurance bike ride to raise much-needed funds for the British Heart Foundation.

The sponsored Sika Cycle 2018 event on 15th September saw pedal-pushing participants take on one of four challenging routes – lasting 25, 50, 70 and 100 miles – with courses weaving their way through the dramatic landscape of Teesdale and Nidderdale within County Durham and North Yorkshire.

On June 11, 2018, the Extraordinary General Meeting of Sika AG approved, among others, the cancellation of the Sika registered shares purchased from Schenker-Winkler Holding AG by way of a capital reduction in the amount of CHF 106,295.20 to CHF 1,417,811.60 (see media release of June 11, 2018). With today's publication in the Swiss Official Gazette of Commerce, the capital decrease has been completed.

Sika is developing its operations in the United Arab Emirates (UAE) with the opening of a new factory in Dubai. An existing production facility for concrete admixtures has been relocated to the new site and expanded. A state-of-the-art mortar facility and a reactor for producing polymers have been installed and will constitute the basis for the production of high-performance concrete admixtures. Furthermore, the new facility will play a strategic role as a sales and distribution center for the region.

Sika has agreed to acquire Polypag, a leading Swiss-based manufacturer and developer of polyurethane foam systems. This acquisition will enhance Sika’s expertise in the area of polyurethane foam development, expand its product portfolio and production capacity, and drive forward the specialist trade business. Last year, Polypag recorded annual sales of some CHF 40 million with a workforce of 120 employees. The transaction is subject to approval by the competition authorities.

▪ Sales growth of 13.9% in local currencies to CHF 3,470.1 million (+15.9% in CHF)
▪ EBIT increase of 10.6% to CHF 444.6 million
▪ Without one-off costs (related to resolution of dispute with SGO) increase in EBIT would have been disproportionately high at more than 16%
▪ Growth in all regions
▪ Opening of three new factories, establishment of another national subsidiary, and acquisition of Index
▪ Sales target of CHF 7 billion in 2018

As part of a tour by a government delegation, Swiss Federal Councillor and Head of the Federal Department of Economic Affairs, Education and Research Johann Schneider-Ammann, accompanied by Azerbaijani Minister of Economic Development Shahin Mustafayev and the Swiss Ambassador Philipp Stalder, visited the new Sika factory near the country's capital, Baku. The modern facility produces concrete admixtures and mortar for the local construction market.

Sika AG today successfully completed a triple-tranche bonds offering with a total amount of CHF 550 million. The payment date of the bonds is July 12, 2018. The bonds were placed under the lead management of UBS AG. They will be listed on the SIX Swiss Exchange. Sika intends to use the net proceeds from the bond offering mainly to refinance the recently announced acquisition of its own shares from Compagnie de Saint‐Gobain, and for general corporate purposes.

Sika has expanded its presence in Saudi Arabia by opening a new production plant for concrete admixtures. Located in Dammam on the east coast of the country, the new factory enables Sika not only to increase its production capacity but also, in particular, to optimize its logistics and hence its cost structure.

At today's Extraordinary General Meeting of Sika AG the shareholders have approved by a large majority all proposals of the Board of Directors.

Following Sika AG's (the "Issuer" or "Sika") successful offering (the "Offering") and provisional allocations of CHF 1,650 million senior convertible bonds (the "Bonds") due 2025 on May 15, 2018 and the expiration of the advance subscription rights period on May 28, 2018, the final allocations of the bonds have been made today and will be communicated to the institutional investors on May 29, 2018.