The Sika growth model is synonymous with long-term success and profitable growth. By targeting the six pillars of market penetration, innovation, operational efficiency, acquisitions, strong corporate values, and sustainability, Sika plans to grow by 6-8% a year up to 2023. At the same time, it is aiming for a higher EBIT margin of 15-18%, instead of today’s 14-16%.
Sika’s Growth Strategy 2023
Sustainability
Sustainability is a key value and a central element of Sika’s corporate management. Already today, Sika offers its customers a range of environmentally friendly product technologies, for instance for energy-efficient construction and environmentally friendly vehicles. In future, Sika products will not only deliver better performance but will feature enhanced environmental benefits as well. Furthermore, Sika has set itself ambitious goals to reduce its annual energy and water consumption, as well as its waste output. With its newly defined sustainability targets, Sika will minimize resource consumption and the environmental impact of its production process. Sika's overriding goal is to reduce CO2 emissions per ton manufactured by 12% until 2023.
Market Penetration
Successful Target Market concept enables cross-selling and offers solutions for new-build as well as refurbishment activities. Strong brand supports market initiatives. Megatrends drive growth.
Innovation
The company’s innovative power will increasingly be channeled into sustainable product development. New products will create clear added value for customers as well as being even more sustainable. 25% of sales will be generated with new products, i.e. those that have been launched on the market in the past five years.
Operational Efficiency
An important driver for margin improvement will be increased operational efficiency. Projects in the areas of operations, logistics, procurement and product formulation will result in an annual improvement in operating costs equivalent to 0.5% of sales.
Acquisitions
Acquisitions enable Sika to enhance its core business with related technologies, as well as to improve access to certain markets or additional distribution channels. Acquisitions are viewed as platforms for further growth.
Values
Strong corporate culture based on empowerment and respect with the focus on customer needs, results, sustainability and integrity. High employee identification with the culture and the company.
Various initiatives contribute to the achievement of the strategic targets:
Key Investments
To expand the supply chain in growth markets, new plants, and acquisitions drive growth and margins. Since 2015 Sika's market presence has been strengthened by 11 new national subsidiaries, 116 new factories and 24 acquisitions.
Investments in R&D
Investments in R&D lead to the launch of a large number of new products in all target markets every year. Sika spends approximately 3% of sales on R&D annually.
Globally Organized Procurement
Globally organized procurement coordinates purchasing in all regions, resulting in more price efficient sourcing.
Focus on Pricing
Focus on pricing with global pricing tools and monthly pricing reporting.
Transparent Performance Management
Transparent performance management focused on well-defined KPIs.
Strict Cost Management
Fast efficiency measures in countries which are not growing.
Operating Leverage
Sales growth of 6-8% generates higher margins, as costs increase at a disproportionately lower rate.