Company Reports

Sika is the market leader in the highly fragmented construction chemicals sector. Established in 1910 following the invention of a waterproofing admixture for mortar, regular product innovations through formulation inventions and adaptations for local markets have been a constant theme for the business, justifying annual price increases. Approximately 25% of Sika’s sales are generated from products released in the previous five years.

Sika reported 2.9% organic revenue growth during the first half of the year, with a sharp acceleration in the second quarter. Full-year guidance for sales growth in local currencies was raised by 2% to between 3% and 6%. Shares are trading 6% higher intraday July 28.

Sika is the market leader in the highly fragmented construction chemicals sector. Established in 1910 following the invention of a waterproofing admixture for mortar, regular product innovations through formulation inventions and adaptations for local markets have been a constant theme for the business, justifying annual price increases. Approximately 25% of Sika’s sales are generated from products released in the previous five years.

Sika reported 0.9% sales growth in local currency, or a 7.0% decline after adverse foreign-currency movements during the first quarter. A double-digit decline in Sika’s China construction business hit organic revenue by 1.2%. Shares are trading 8% higher intraday.

Sika is the market leader in the highly fragmented construction chemicals sector. Established in 1910 following the invention of a waterproofing admixture for mortar, regular product innovations through formulation inventions and adaptations for local markets have been a constant theme for the business, justifying annual price increases. Approximately 25% of Sika’s sales are generated from products released in the previous five years.

Sika reported full-year results, having previously provided a trading update on Jan. 13. Sika's EBITDA margin fell by 90 basis points to 18.4%, or 19.2% excluding CHF 86 million in restructuring charges. The fiscal 2026 EBITDA margin is expected to be between 19.5% and 20.0%.

Sika's organic revenue fell 0.4% in fiscal 2025, driven by weak construction activity in China. Excluding Sika's Chinese construction business, organic sales would have risen by 1.2%. EBITDA guidance for 2025 was also lowered. Shares are trading 7% lower Jan. 13. Only sales figures were provided.

Sika is the market leader in a highly fragmented construction chemicals sector. Its one-stop shop strategy and brand reputation have helped establish close customer relationships within the construction sector, supporting its pricing power and keeping profitability relatively stable through the cycle. Established in 1910 following the invention of a waterproofing admixture for mortar, regular product innovations through formulation inventions and adaptations for local markets have been a constant theme for the business, justifying annual price increases. Approximately 25% of Sika’s sales are generated from products released during the previous five years.

Sika is the market leader in a highly fragmented construction chemicals sector. Its one-stop shop strategy and brand reputation have helped establish close customer relationships within the construction sector, supporting its pricing power and keeping profitability relatively stable through the cycle. Established in 1910 following the invention of a waterproofing admixture for mortar, regular product innovations through formulation inventions and adaptations for local markets have been a constant theme for the business, justifying annual price increases. Approximately 25% of Sika’s sales are generated from products released during the previous five years.

Sika reported a 1% revenue increase in local currencies during the first nine months of fiscal 2025, entirely driven by acquisitions, with organic revenue flat year over year. A CHF 80 million-CHF 100 million restructuring program, which includes cutting 1,500 jobs, was announced.

Sika is the market leader in a highly fragmented construction chemicals sector. Its one-stop shop strategy and brand reputation have helped establish close customer relationships within the construction sector, supporting its pricing power and keeping profitability relatively stable through the cycle. Established in 1910 following the invention of a waterproofing admixture for mortar, regular product innovations through formulation inventions and adaptations for local markets have been a constant theme for the business, justifying annual price increases. Approximately 25% of Sika’s sales are generated from products released during the previous five years.

An increase in Sika's EBITDA margin partially offset the impact of a 3% decline in net sales during the first half. Unfavorable currency translation and soft demand in China were the main contributors behind its first-half sales coming below FactSet consensus. Shares are trading 3% lower intraday.

Sika reported first-quarter revenue growth of 1.9% in local currencies, including a 1% contribution from acquisitions.

Sika is the market leader in a highly fragmented construction chemicals sector. Its one-stop shop strategy and brand reputation have helped establish close customer relationships within the construction sector, supporting its pricing power and keeping profitability relatively stable through the cycle. Established in 1910 following the invention of a waterproofing admixture for mortar, regular product innovations through formulation inventions and adaptations for local markets have been a constant theme for the business, justifying annual price increases. Approximately 25% of Sika’s sales are generated from products released during the previous five years.

Sika reported a 17% increase in its diluted EPS to CHF 7.76 in fiscal 2024, broadly in line with FactSet consensus. The integration of its 2023 acquisition of MBCC was a major driver of growth. Shares are trading 2% higher intraday.

Sika reported 5% revenue growth, or 7% in local currencies, during fiscal 2024 and confirmed its full-year EBITDA guidance of "over-proportional" growth in a brief trading update.

We maintain our CHF 230 fair value estimate for narrow-moat Sika following its solid 9-month results. Revenue increased 9% year over year in local currencies, of which 8% is attributable to acquisitions. We’re pleased to see positive momentum in organic revenue growth, which accelerated to 2% during the third quarter despite challenging end markets and is tracking our full-year estimate. In North America organic sales growth exceeded 4% in the third quarter, driven by North American infrastructure and reshoring projects and is materially higher than what Holcim reported for the region. Full-year sales guidance of between 6% and 9% in local currencies was maintained, which suggests a strong end to 2024 is expected.

Narrow-moat Sika delivered strong results, marginally beating Vara consensus for first-half revenue and EBITDA. Revenue grew 13% year over year to CHF 5.8 billion during first-half 2024, including a 12% contribution from the acquisition of MBCC Group. The integration of MBCC is tracking ahead of management's initial expectations, and they have raised their annual expected synergies by CHF 20 million to between CHF 100 million and CHF 120 million for fiscal 2024. Sika’s full-year guidance of revenue growth between 6% and 9% and an overproportional increase in EBITDA was confirmed. Shares are trading 2% higher and screen as overvalued to our CHF 230 fair value estimate, which we maintain.

We’re initiating coverage of construction chemicals producer Sika with a fair value estimate of CHF 230 and a narrow moat rating. We anticipate Sika will grow earnings per share at an annualized rate of 12% during our forecast period. We believe its attractive growth prospects, brand reputation for reliability, and runway for mergers and acquisitions justify our implied 26 times forward P/E multiple, which is consistent with its 10-year average. Shares are currently trading at a 14% premium to our fair value estimate, thus we suggest investors wait for a better entry point.

Sika is the market leader in a highly fragmented construction chemicals sector. Its one-stop shop strategy and brand reputation have helped establish close customer relationships within the construction sector, supporting its pricing power and keeping profitability relatively stable through the cycle. Established in 1910 following the invention of a waterproofing admixture for mortar, regular product innovations through formulation inventions and adaptations for local markets have been a constant theme for the business, justifying annual price increases. Approximately 25% of Sika’s sales are generated from products released during the previous five years.