Sika starts strong with 10.7% sales growth in the first quarter of 2017
A moderate currency effect (-1.7%) led to strong sales growth in Swiss francs of 9.0%. High organic growth of 8.5% was recorded. The solid growth in all regions was boosted by additional working days compared with the previous year.
Successful strategy implementation
Jan Jenisch, CEO: “The strong start to the year is the result of our successful strategy implementation. Our investments in new products, national subsidiaries and factories are paying off, enabling us to exploit the potential of growth markets for Sika quickly. We will be implementing our growth model with raised targets for 2020, and opening eight new factories and a further three national subsidiaries in 2017.”
Growth in all regions
Sales in the EMEA region (Europe, Middle East, Africa) increased by 9.9% (previous year: 8.7%). The core markets Germany, France, Switzerland, Spain and Italy achieved solid growth rates. Strong above-average growth was seen in the UK, Eastern Europe and Africa. Bitbau Dörr, a leading manufacturer of waterproofing systems, was acquired in Austria.
At 19.2%, it was the North America region that posted the strongest growth (previous year: 12.6%), of which 9.7% was through acquisitions. Sika boosted its business volume significantly in the USA, achieving strong double-digit growth of over 20%. Investments in expanding the supply chain and sales force in fast-growing metropolitan areas, and the upswing in the construction sector, contributed substantially to this successful business performance.
With a sales increase of 6.7% in the first quarter of this financial year, growth in the Latin America region exceeded the 4.0% achieved in the equivalent period of the previous year. Mexico, Argentina and Uruguay produced above-average performance, but the consequences of the economic crisis continued to have an impact on business in Brazil. In the southeast of Mexico, a new mortar production facility came into operation.
Growth in the Asia/Pacific region increased to 6.8% (previous year: 4.3%). The markets in South-east Asia and the Pacific area achieved the highest growth rates, recording substantial rates of increase. Business in China developed well, with double-digit sales growth in the first quarter.
Sales to exceed EUR5.61 billion in 2017
The strong start to the year supports the outlook for the business year 2017. Sika targets a 6-8% rise in sales to more than EUR5.61 billion for the first time. Volatile and rising commodity prices present a key challenge in the current financial year. EBIT and net profit should continue to increase at a disproportionately high rate. The growth strategy will be pursued in 2017 with the opening of eight new factories and the founding of a further three national subsidiaries.