Sika gains market share and reduces costs
(Thomson Reuters ONE) - Corporate news announcement processed and transmitted by Hugin AS.The issuer is solely responsible for the content of this announcement. ------------------------------------------------------------------------------------ In the first nine months of the business year Sika expanded itsmarket share and reduced operating costs. In addition the companybenefited from lower raw material prices in comparison with those ofthe previous year period. The decline in sales in local currenciesslowed to 5.2% (half-year -6.3%). Sales decreased by 11.6% in Swissfrancs to CHF 3 132.6 million. The operating profit of CHF 321.8million before restructuring costs lay 18% (half-year -40.8%) belowthat of the previous year.SalesConditions in the company's target markets did not changesignificantly during the period under review. Sika neverthelesssucceeded in expanding its market share in some markets. The declinein sales has thus slowed somewhat, amounting to 5.2% in localcurrencies for the first nine months of the business year (half-year-6.3%). Included is an acquisition effect of 2.3%. Exchange ratefluctuations had a negative effect of 6.4%, so that sales in Swissfrancs decreased by 11.6% from CHF 3 543.1 million to CHF 3 132.6million in comparison with the previous year period.SegmentsSika experienced further growth in local currencies in the RegionsIMEA (India, Middle East, Africa, +9.9%) and Latin America (+8.2%).In other Regions sales declined: Europe North -10.0%, Europe South-4.5%, North America -9.1% and Asia/Pacific -3.1%. In this latterRegion sales development varied widely from country to country. WhileSika achieved double-digit growth rates in emerging countries such asChina and Indonesia, sales decreased in OE CD nations (Japan,Australia, New Zealand). Adjusted for exchange rates, sales ofproducts for the construction industry declined by 2.1% during thefirst nine months of the business year, including an acquisitioneffect of 3.0%. The decrease in sales of products for industrialmanufacturing (primarily in vehicle construction) amounted to 16.6%.EarningsSika benefited during this reporting period from significantly lowerraw material prices in comparison with the previous year period.Gross profit in relation to net sales improved by 2.1 percentagepoints to 55.1%. Operating costs before restructuring declined all inall by 6.3% (adjusted for acquisitions by more than 9%). Inparticular the reduction of other operating expenses by CHF 80million added to this result. At CHF 321.8 million, the operatingprofit before extraordinary restructuring costs lay 18% (half-year-40.8%) below that of the previous year, yielding a margin of 10.3%(previous year 11.1%). Restructuring costs in the amount of CHF 22.7million impacted the income statement in the third quarter. Operatingprofit (EBIT) amounted to CHF 299.1 million, corresponding to adecline of 23.8% in comparison with the previous year period. TheEBIT margin reached 9.5% (previous year 11.1%). Consolidated netprofit totaled CHF 199.9 million, or 6.4% (previous year 7.3%) ofsales.OutlookAlthough the global economy overall appears to have reached the lowpoint of the recession, the economic prospects for the constructionindustry and for large areas of industrial manufacturing remainunpredictable. Sika anticipates positive impulses in the area ofinfrastructure projects as a result of the economic stimulus programsintroduced by many countries, whereby it remains open when theseimpulses will actually be felt. On the other hand the companyperceives few signals for early recovery in the area of commercialconstruction, since in view of large excess capacity privateinvestors have little incentive for new investments. Residentialconstruction will persist at a low level. Market development in thearea of industrial manufacturing is in large part dependent onconsumer purchasing. Rising unemployment figures and stagnating ordeclining consumption make it apparent that the situation is stillunstable, and that confidence in an economically balanced future hasnot yet returned. In its target markets Sika will continue to exploitexisting market opportunities intensively and pursue its costreduction efforts further. Therefore additional restructuring costsare anticipated in the fourth quarter.Income statement % 1/1/2008 - % 1/1/2009 - Changein CHF mn 9/30/2008 9/30/2009 in %Net sales 100.0 3 543.1 100.0 3 132.6 -11.6Other operating income 0.2 7.3 0.2 4.7Changes in inventory 0.9 30.3 -0.1 -1.9Operating revenue 101.1 3 580.7 100.1 3 135.4 -12.4Material expenses -48.1 -1 704.2 -45.0 -1 410.1Gross result 53.0 1 876.5 55.1 1 725.3 -8.1Personnel expenses -20.4 -722.2 -22.8 -714.4Other operating expenses -18.9 -669.4 -18.8 -589.8Operating profit beforedepre-ciation and restructuringcosts 13.7 484.9 13.4 421.1 -13.2Depreciation -2.1 -73.9 -2.5 -77.1Amortization -0.5 -18.6 -0.7 -22.2Operating profit beforerestructuring costs 11.1 392.4 10.3 321.8 -18.0Restructuring costs 0.0 0.0 -0.7 -22.7Operating profit (EBIT) 11.1 392.4 9.5 299.1 -23.8Interest income 0.1 4.0 0.1 1.9Interest expense -0.5 -18.1 -0.6 -19.7Other financial income 0.1 2.3 0.0 0.4Other financial expenses -0.5 -16.1 -0.2 -7.3Income from associatedcompanies 0.1 2.2 0.2 5.6Profit before taxes 10.3 366.7 8.9 280.0 -23.6Income taxes -3.1 -108.4 -2.6 -80.1Net profit 7.3 258.3 6.4 199.9 -22.6Profit attributable to Sikashareholders 7.3 257.5 6.4 199.9Profit attributable tominority interests 0.0 0.8 0.0 0.0Net sales in the first nine months 1/1/2008 - 1/1/2009 - Change compared to prior yearin CHF mn 9/30/2008 9/30/2009 (+/- in %) In Swiss In local Currency francs currencies[3] impactBy regionEurope North[1] 1 352.9 1 121.0 -17.1 -10.0 -7.1Europe South[1] 820.4 719.0 -12.4 -4.5 -7.9IMEA[2] 195.1 197.0 1.0 9.9 -8.9North America 491.6 460.1 -6.4 -9.1 2.7Latin America 321.0 288.2 -10.2 8.2 -18.4Asia/Pacific 356.0 339.0 -4.8 -3.1 -1.7CentralServices[1] 6.1 8.3 35.5 35.5 0.0Consolidatednet sales 3 543.1 3 132.6 -11.6 -5.2 -6.4Construction 2 811.1 2 557.9 -9.0 -2.1 -6.9Industry 732.0 574.7 -21.5 -16.6 -4.9[1] Due to the first-time application of IFRS 8 - Business Segments,the internal business area Sika Supply Center (includes amongstothers central plants), assigned to the two European Regions in 2008,has now been allocated to Central Services. Net sales and theoperating result of Central Services as well as the Regions EuropeNorth and Europe South have been adjusted as a result.[2] India, Middle East, Africa (IMEA)[3] including acquisitions-END-Sika AGZugerstrasse 50CH-6341 Baar, Switzerlandwww.sika.comContact: Rainer Weihofen,Corporate Communications & Investor RelationsTel.: +41 58 436 68 00Fax: +41 58 436 68 50weihofen.rainer(at)ch.sika.comSika AG Corporate ProfileSika AG, located in Baar, Switzerland, is a globally active companysupplying the specialty chemicals markets. It is a leader inprocessing materials used in sealing, bonding, damping, reinforcingand protecting load-bearing structures in construction (buildings andinfrastructure construction) and in industry (vehicle, buildingcomponent and equipment production).Sika's product lines feature high-quality concrete admixtures,specialty mortars, sealants and adhesives, damping and reinforcingmaterials, structural strengthening systems, industrial flooring aswell as roofing and waterproofing systems. Subsidiaries in more than70 countries worldwide and approximately 12,900 employees linkcustomers directly to Sika and guarantee the success of all of itsbusiness relationships. With this business structure Sika generatesannual sales of CHF 4.6 billion. Visit our website at www.sika.com.The media release and the Shareholder letter can be downloaded fromthe following links:http://hugin.info/100359/R/1351364/326564.pdfhttp://hugin.info/100359/R/1351364/326565.pdf --- End of Message ---Sika AGZugerstrasse 50 Baar WKN: 858573; ISIN: CH0000587979; Index: SMCI, SPI, SPIEX, SMIEXP, SMIM;Listed: Main Market in SIX Swiss Exchange;
Datum: 30.10.2009 - 05:00 Uhr
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