Letter to Stakeholders

Sika achieves global growth of 1.6% in local currencies and expands its profit margin

Dear Readers,

Despite a challenging economic environment, Sika continued to grow in local currencies in the first half of 2025, achieving a year-over-year increase in its profit margin at EBITDA level. However, the weaker US dollar, which lost 10% against the Swiss franc in the second quarter, as well as ongoing uncertainties on the global markets, had an impact on the results.

INCREASE IN EBITDA MARGIN AND RAISED TARGETS FOR MBCC SYNERGIES

Sika increased its sales in local currencies by 1.6% in the first half of 2025. The foreign currency effect amounted to -4.3%, primarily due to the weakness of the US dollar. As a result, Sika generated sales in Swiss francs of CHF 5.68 billion (previous year: CHF 5.83 billion). In a contracting overall market, Sika managed to achieve positive organic growth of 0.6%.

At 55.1%, the material margin was kept at a consistently high level (previous year: 55.1%). The EBITDA margin increased to 18.9% (previous year: 18.7%) against the backdrop of stable input costs, additional efficiency gains, and strong synergy momentum. The MBCC synergy targets were raised by CHF 20 million (new target 2025: CHF 160-180 million, new target 2026: CHF 200-220 million). Operating profit before depreciation and amortization (EBITDA) reached CHF 1,070.4 million in the first half of the year, down slightly compared to the previous year due to strong foreign currency effects. 

In line with the multi-year average, but lower than the exceptionally high previous year, Sika's operating free cash flow came in at CHF 181.9 million (previous year: CHF 401.3 million). The reduction is due to an increase in net working capital and unfavorable currency development as well as higher investments in future growth. The majority of operating free cash flow is generated in the second half of the year, and will be supported by Group-wide net working capital initiatives.

INVESTMENTS DRIVING FURTHER GROWTH

Sika made targeted investments in the first half of 2025 to strengthen its global market position, acquiring four companies and commissioning seven new plants. With more than 400 production sites in 102 countries, the company has an extensive global manufacturing network, producing its cutting-edge technologies locally. Sika is therefore largely unaffected by trade tariffs and can reliably supply its customers, even in challenging market conditions. 

All regions outperformed their markets. Investments were made around the world – both in bolt-on acquisitions and in the expansion of production capacities to support future growth. One strategically important step was the minority stake in Giatec™ Scientific Inc., a Canada-based global leader in digital concrete technologies. Specializing in smart testing methods and AI-powered solutions, Giatec develops innovative sensors, software solutions, and data analytics tools to optimize concrete quality, durability, and sustainability – from production and transportation to placement at the construction site plus the later monitoring of the structures.

EBITDA MARGIN ROSE TO

+18.9%

GLOBAL MARKET SHARE GAINS AND SLIGHT RECOVERY IN EMEA

The first half of the year showed a slight recovery in the construction markets of the largest region, EMEA (Europe, Middle East, Africa), with growth of 3.1% in local currencies in the second quarter (first quarter: 0.7%). For the whole reporting period, sales growth in local currencies amounted to 1.9% (previous year: 13.5%). Sika recorded significant double-digit sales increases in the Middle East and Africa. Construction markets are also showing the first signs of a recovery in Eastern Europe. In Germany, Sika’s strong sales organization is perfectly positioned to benefit from the government’s recently approved infrastructure program. This package provides for EUR 500 billion to be invested in the modernization and expansion of the national infrastructure over a ten-year period.

Sales in the Americas region increased by 3.5% in local currencies (previous year: 15.1%). After a good start to the fiscal year, the mixed signals in US trade policy unsettled many market participants, which also somewhat slowed the market momentum. While this caused Sika’s growth in the USA and Mexico to weaken, the positive growth momentum of the previous year continued in Latin America. Investments in data centers and government-subsidized infrastructure and commercial construction projects supported the development of the US construction market. Thanks to Sika’s local presence – with nearly 100% of its products and solutions sold in the US also manufactured in-country – and its market leadership in the renovation segment, Sika succeeded in outperforming the overall market in this challenging environment.

Local currency sales in the Asia/Pacific region declined slightly by -1.7% in the first half of the year (previous year: 8.0%). This result is mainly attributable to the challenging, deflationary market environment in the Chinese construction sector, for which Sika is focusing on protecting its margins and driving efficiencies. Excluding the negative development in China, Sika would have achieved positive low-single-digit growth in the region. Market development for Sika was particularly dynamic in India and Southeast Asia as well as in the Automotive & Industry segment, where the company was able to further expand the share of its technologies in vehicles from both local and international manufacturers. 

OUTLOOK

Amid uncertain market development, arising in particular as a result of ongoing trade conflicts, Sika will continue to grow above the market and focus on margin improvement. For the 2025 business year, Sika expects a modest sales increase in local currencies. The company continues to expect an over-proportional increase in EBITDA and an EBITDA margin of between 19.5% and 19.8%.

Sika is confirming its strategic medium-term targets for 2028 for sustainable, profitable growth.