Sika for lasting bonds. Report on the third quarter of 2005

Transcription

1 Sika for lasting bonds Report on the third quarter of 2005 November 2005

2 Sika Group Sustained growth In the first nine months of 2005 Sika s net sales totaled CHF 2,173 mil., an increase of 12.1% compared to the corresponding period a year earlier. The organic growth adjusted to the influence of acquisitions and desinvestments was 11.8%. Currency-adjusted, sales were up 11.3%. Expressed in Swiss francs, third-quarter sales were 14.6% higher or, denominated in local currencies, 11.5%. The competitive environment continued to keep pressures on margins. On the other hand tensions in raw material markets have eased somewhat. Prices, however, remain at a high level. Initiatives launched to boost efficiency continued to yield improvements. Personnel expenses and other operating expenses were down by 1.8 percentage points. Development of earnings Rising to CHF mil., operating profit (EBIT) advanced 10.9% over the corresponding period last year. The EBIT margin decreased slightly from 9.8% to 9.7%. Consolidated net profit developed gratifyingly in the first nine months; at CHF mil. it surpassed year-ago results by 21.0%. Sika s operating free cash flow totaled CHF 47.7 mil. Performance by Divisions Calculated in Swiss francs, sales of the Construction and Industry Divisions rose by 11.8% and 12.8% respectively during the first three quarters of In both divisions sustained growth was achieved by Sikaflex adhesives and sealers, as the market penetration of these products was spurred on. In the construction sector success is additionally driven by admixtures for the production of precast elements as well as the growth strategy adopted for the retail and do-it-yourself business. The Industry Division s sales expansion, being generated principally in building component and automotive markets, results from new orders and the introduction of new product technologies like the use of adhesives on assembly lines as well as the rising volume of commercial vehicle sales throughout the world. Regional business Sales in Northern Europe, expressed in Swiss francs, were up by about 9.1%. A provision for future pension liabilities lowered results in Germany. In Southern Europe sales improved by 8.3%. The North American region was the only one to be exposed to an adverse currency effect which, when denominated in Swiss francs, reduced growth from 17.1% by 2.3% to 14.8%. In Latin America Sika s business, expressed in Swiss francs, moved ahead sharply with a plus of 28.5% of which currency effects contributed 5.7%. Nearly all Latin American companies participated in the advance, especially those operating in larger markets like Brazil, Argentina and Mexico. In the Asia/Pacific region net sales (in Swiss francs) increased 20.6%, despite declines in Japanese and Taiwanese sales in the third quarter. Outlook to year-end 2005 Assuming unchanged business conditions and stable raw material prices Sika expects a sales increase for all of 2005 in line with the pattern established so far and a strong increase in earnings compared to the prior year. Seasonal conditions make the fourth quarter traditionally the weakest quarter in the Group s sales development. Sika AG Sika redeemed the % bond in the amount of CHF 150 mil. on July 20. It drew on its syndicated credit facility for the redemption. On September 28, 2005 Sika submitted a public tender offer for the purchase of all publicly-held registered shares of Sarna Polymer Holding Inc., a Swiss-based company. When the deadline for the offer expired on October 25, 2005 Sika had won 70.58% of Sarna s share capital and voting rights; the commitments included Sarna s own shares. The acquisition is expected to be completed in full by the end of November. With kind regards, Sika AG Dr. Walter Grüebler Chairman of the Board Ernst Bärtschi Chief Executive Officer

3 Key Data of the Consolidated Income Statement Consolidated Income Statement from January 1 till September 30, 2005 in CHF mil. % 1/1 9/30/2004 % 1/1 9/30/2005 Change in % Net sales % Other operating income % Changes in inventory % Operating revenue % Material expenses % Gross profit % Personnel expenses % Other operating expenses % Operating profit before depreciation (EBITDA) % Depreciation % Amortization % Impairment % Operating profit (EBIT) % Interest income/expense % Other financial expenses % Income from participations % Consolidated net profit before taxes % Income taxes % Consolidated net profit after taxes % Minority interests Consolidated net profit after minority interests Key data for the third quarter in CHF mil. 7/1 9/30/2004 7/1 9/30/2005 Change in % of in % of in % net sales net sales Net sales % Operating profit before depreciation (EBITDA) % Operating profit (EBIT) % Consolidated net profit after taxes %

4 Segment Information Sika Group Consolidated net sales for the first nine months in CHF mil. 1/1 6/30/2004 1/1 6/30/2005 Change compared to prior year (+/ in %) in Swiss in local Currency francs currencies effect By region Europe North % 7.6% 1.5% Europe South, incl. Africa and Near East % 8.2% 0.2% North America % 17.1% 2.3% Latin America % 22.8% 5.7% Asia/Pacific % 19.8% 0.8% Consolidated net sales % 11.3% 0.8% By division Construction % 10.9% 0.9% Industry % 12.4% 0.4% Consolidated net sales % 11.3% 0.8% Net sales in the third quarter in CHF mil. 7/1 9/30/2004 7/1 9/30/2005 Change compared to prior year (+/ in %) in Swiss in local Currency francs currencies effect By region Europe North % 10.8% 2.6% Europe South, incl. Africa and Near East % 8.0% 1.6% North America % 20.7% 1.1% Latin America % 29.0% 14.5% Asia/Pacific % 4.4% 4.0% Consolidated net sales % 11.5% 3.1% By division Construction % 12.0% 2.9% Industry % 10.0% 3.3% Consolidated net sales % 11.5% 3.1%

5 Important Dates Wednesday, March 8, 2006 Annual Report 2005 Thursday, April 6, th Annual General Meeting The statements in this review relating to matters that are not historical facts are forward-looking statements. They are no guarantee of future performance and involve risks and uncertainties with regard to future global economic conditions, foreign exchange rates, regulatory rules, market conditions, the actions of competitors and other factors beyond the control of the company. The consolidated financial statements are prepared according to the International Financial Reporting Standards (IFRS). This annual report is available in both German and English and can also be accessed on our website The printed German text is the definitive version.

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