Sika Ag Adr

Welcome to our annual results presentation. Thanks for joining us here in Zurich or online. We appreciate your interest in our company very much and look forward to an exciting two hours. Before I start with the presentation, I would like to share my deep appreciation and thanks to our organization, the 33,000 employees, which I have the privilege to lead. And I also stand here on behalf of all of them presenting our joint collaborative achievements in 2023. I believe it's a strong statement of the power of the organization, what we can do, and we go into the detail as we go. But it's not me. It's all of us in the company. Some of them are here in the room, mostly here. A big thank you for organizing just a perfect setting to guide us through the next hours here. It's a people company, and our people have made tremendous achievements possible in the last 12 months and also moving forward. Now, going into 2023, I think on a high level, the highlights on the top line we shared on January 10 already, 14.5% growth and organic in the local currency, 7.1% growth. In Swiss francs, a lot of Appreciation of the Swiss francs, of course, in here. Adrian will go into all the details in regards to those numbers. The EBIT reported slightly below last year. I think here we stay with our reported EBIT as a guiding principle. But at the same time, we know that here quite substantial one-time costs through the acquisitions are included. If we take those out, we have raised our EBIT performance by 80 base points. in 23, reaching a level of 15%. We are especially proud of the strong cash generation that has led to a record in operating free cash flow of 1.37 billion Swiss francs, a plus of almost 60%. I think this is a clear manifest of the power of the company to generate cash to the benefits of all. The key investment in 23 clearly is the closing of our transaction, the MBCC, which I will come in more details. We talk a lot about the cost of the transaction, but I believe it's significant to see that already in eight months we have been able to generate 41 million of synergies and more to come. Our innovation and sustainability drive, a key aspect of SICAS in the past and in the future, Also here, accelerating with the power that we gain by growing organically and through acquisition. 108 new patents, 188 new inventions. These are just signals of the power of this combined organization going forward. At the same time, we have done our homework and continue to do our own, let's say, improvements on the CO2 reduction, talking scope one and two, with a reduction of 4.4%. percent overall per ton sold. This picture is a picture that I don't know how, but magically all the regions are at 15 percent growth. So Adrian, thank you for balancing that so well. But of course, it's clear here this 15 percent growth in the region is fueled by the acquisition, which obviously then also has helped all the regions to reach new heights. The global business region, which is the last time that we report independent, without acquisition, reached double-digit growth, a clear sign also of the recovery of the automotive business overall, as well as our traction in gaining new applications, especially on the e-mobility side in that business. It's not just the numbers that matter. We also have high emphasis on The non-financial areas, I talked about the CO2 reduction, scope one and two, but also safety is a topic that we consider a key element to make sure we have a safe work environment. We reduced the accident rate by almost 24%. Waste is bad. Waste is something in multiple ways that we want to reduce. Also here, good progress. Water consumption reduction. I think here all the arrows show in the right direction. But we can't stand still. We have to go further also on that journey. And I come back to that when I talk about the strategy 28. As always, ZK is investing in the future, investing inorganically as well as organically. And I mentioned MBCC, the biggest investment. But we also did two other acquisitions, Thyssen in the U.S. and Gemma in Peru. And we also explore new ways of, let's say, tapping into interesting startup companies here, a company in Finland that has an excellent cementitious flooring system that we can leverage. And we took a share or a stake in that company that is going to fuel some exciting specialty floors in Sika. The investments organically are expansion of the footprint, reinforcing of strong hubs like the U.S. is a strong hub. More than 40 factories in the U.S. alone. And here we invest also into future growth. And the expansion in Sealy in Texas, the expansion in Chattanooga are a manifest also of our strong belief that North America is a place to be and a place to further invest. But that's not only there. India is mentioned here with a new factory in India. India is a booming market. I will show later on a bit more details on that. And innovation. Innovation, the opening of the technology center in Suzhou, in China. It's the second largest technology center of SICA. Behind Zurich, it's a clear statement that Asia, Asia Pacific, with this hub, building a strong competence level that influences the rest of the world as much as the rest of the world influences Asia Pacific. I think this is a slide just showing the base of our business in a way we talk more and more the vertical aspects of our business. And you see a strong balance. The infrastructure and the commercial are two very important segments for us. Vertical markets, the residential growing, not, let's say, being dominant, but clearly visible and relevant and a great opportunity for more. And then the automotive and the industry segment that is also an excellent addition to the three others. This is the base. where we come from, and this is the base where we also build the future. And it's a very strong mix of vertical markets that we focus on. Another angle to look at our business, the base business, is emerging and mature markets. We have always shared this view, but you see how the emerging markets are catching up 41%, while also mature markets are growing. So this is not the one or the other. Both of them can grow, and that's what we're aiming at. The same is with the New build versus refurbishment. Here you see the ratio as well. Our refurbishment is dominant. That comes from our strong position in Europe and in North America, where a lot of refurbishment of infrastructure and building is a core business. While as the new build also is, of course, in emerging markets, the majority and our priority to grow. So it's also here, this is an excellent balance, also hedging. let's say, besides the vertical through the geographical balance, the company. We are very proud of our historical performance status. We stand for market share gain. We stand for over-proportional profitability improvement, and we have delivered that over the past six years, starting 2018 as an indicator of growing in Swiss francs 9.7% annually and growing the EBIT 12.2% year over year. Here we took the liberty in 22 and 23 to show the EBIT evolution, excluding the one-timers, which Adrian will go into details, but it's the underlying strong operational performance of the company over these six years. And we intend to continue that, of course, also in the next years ahead of us. Many questions in this wild 20s came up. How do we explain this? How is that? And how are you doing and the markets are doing? I think we tried here to bring some clarity what happened in 2020 when we had a standstill of the economy worldwide. We had a negative organic growth. And we compare us, let's say, to our peers in the industry. This is about a dozen of players that are listed that we have data to that we can compare. We all went into this COVID, let's say, incident and we had to preserve our companies. And I think we did well, but everybody had to adapt. And you see our peer organic growth, our organic growth almost at the same level. But then the year 21 was the year where things came back, volumes came back. And in a volume positive market, we excel. We have clearly surpassed our peers in this race for the volume, and we delivered very well. 22, the year where pricing was an absolute mandatory topic to offset the ever-rising input cost, and here Looking for margin, looking for pricing has been clearly a main focus in that environment. But also we have to consider that our split is a little bit different than others, where the price increase in Asia has been a fraction of the price increase in Europe and in North America, even also the lower input cost variations there. So it is a strong performance there as well. And then we come into 23 last year, a year again with a lot of challenges, negative volumes to start into the year. Some of them have improved. Some have more or less stayed flat. But you see, we grew by acquisition, obviously, no secret. But then we compare our 1.2 organic growth with the Minus 3.5 of our peers, I think a substantial overachievement in a tougher market where less is available, but we succeeded to gain market share in a profitable way. Now, talking about NBCC, my favorite topic anyhow for quite a while. Now it's real. Now we are in execution mode, 6,000 employees on board on the 2nd of May. 2.1 billion Swiss francs. That's the number we communicated at the beginning of the journey. Converting it into today's Swiss franc is probably less than 2 billion, but still significant. And it's a major boost to the organization, but it comes from the, let's say, complementarity that we have in the field. The portfolios, the strengths of combining two major players offering to our customers a full range, the strongest range in the industry has shown huge potential, which leads to the next slide, an important slide, of course, the synergies that we are generating through this transaction. And as I mentioned, we already collected 41 million in 23, and we have a clear, let's say, pace up to 180 to 200 million in the years to come, and here outlining also how this segmentation goes in 24 and 25. Wonderful, but these numbers are the result of all the complementarity that we see, complementarity on the commercial side, on the sales side, as well as on the cost side, where we have a tremendous synergy potential, and we go after it, and we are doing very well on that journey. it's the people that make such a transaction work. And we have invested a lot and we still invest a lot into staying close to the organization, the new joiners, as well as the, the secret organization. We, we measure this constantly. We call it the pulse check to see how the organization is, is going along with the strategic direction. Is it understood? Is it a, Is it positively perceived? And here we see, you know, a pitch that overall is very encouraging. But of course, you also see points where we have to go and dial in and help the organization to improve. So it's an excellent tool for us to safeguard that the main asset of this transaction, the people on our side, on the new joiner side, are fully engaged in executing the initiatives that we have outlined for the future. Let's talk a little bit our midterm aspiration. I think it was presented at the Capital Market Day where we said, okay, yes, we are here in 23. This slide is updated with the 23 figures. Aspiration wise, we are very clear. We want to continue to grow, grow profitable, ultimately, We want to be in the 20% to 23% EBITDA range going forward and 6% to 9% CAGR in local currency growth going forward. I think we are well on track into this journey and a few aspects I would like to just remind us why we are so confident and why we have such a great opportunity ahead of us. The market is huge. 110 billion is our addressable market. We have 11% market share. As you can see, it's quite fragmented. Half of it is probably covered by the top 30, and the other half is individually in local players or regional players. There's a lot to gain for us. 89% are still up for us to go for, and we intend also to raise our market share going forward, organically and inorganically. I think the strategy, SICA-like, quite simple, four pillars that are the engine of driving the right-hand side, the financial results, the non-financial results, which we have clearly also brought in line with our expectation, what we as a company are committing ourselves to, say, on the SBTI targets to reduce the greenhouse gas emission, but also on the people side, the column that is driving everything we do, making sure that we maintain and build on the strong engagement of our employees, but also then the natural resources to do our own homework in helping to preserve the natural resources going forward. Now, this is a slide that shows how The 6% to 9% are built up and not so much on the underlying market or the acquisition. It's the core element, the key lever of the growth. It's the market penetration. And here for us, the leveraging of our strong position, which has been a key contributor in the past six years as outlined, still a lot more that we can expect there. If you just bring all the countries to a similar level like the average, we have more Magnificent growth potential. Frost selling on the buildings, on the structures. We have so much more we can do and we want to tap into that as well. Much more the vertical markets are a signal for how we are addressing as an additional dimension, also the potential that comes with the nature of the construction. Multi-channel, indirect, direct retail growth. which then, of course, goes more into the residential area. Huge opportunities. Our brand is the strongest brand in the industry. Let's leverage it. Let's bring it also more and more into the distribution, the retail. We can definitely take great advantage of there. Then Christoph's preferred slogan, go where the money is. I think, yes, absolutely right. We invest in key markets where we where we know there are activities and we want to tackle them and not waste our energy on things that are irrelevant. Key geographies, I will show another slide in this regards. That goes hand in hand with go where the money is. It's also focusing on not neglecting, but at the same time being aware where the key geographies of our companies. And then we have high potential markets, specialty markets where we can also Excel, and here I would say our adhesive business is a business that has, I say, outstanding opportunities going forward, our cementitious business, outstanding opportunities, so I think we want here also to leverage furthermore. The key geographies, as I mentioned, look at the map, not too much yellow, but the yellow represents 75% of the 110 billion. So, and we are in Europe, we are in the US, we are in China, very strong. Not to forget the US is our largest single market. 20% of our revenue is generated in the US. China is 10% of our revenue. It's the second largest single country. Europe, okay, 27 countries. So we aggregate that, of course, the biggest single market by itself, but India, An emerging market, Japan, I would say an underestimated market for many Western companies, but we have the footprint in China, sorry, in Japan. And Japan is a significant market with very interesting specific, let's say, requirements. I will show that in a moment, how we tap into that and benefit from all these key markets leveraging our competencies across the globe. Looking into the U.S., I think everybody's aware that the U.S. is in a change mode. The outsourcing of manufacturing, which was the theme of the past 20 years, has come to a stop. It is coming back. Industry is coming home to the homeland. And it is called the reshoring and with significant projects. It's taking place. I mean, you see it in the statistics. This is an example of the Samsung factory in Austin, Texas. I was there in September. It's huge. 557,000 square meter plant. This factory has 1,250 acre size. For those that don't understand acres, this is five square kilometers is this factory. It will generate 50,000 jobs. And the jobs generate cities around and infrastructure around. So this is not just investment that happens, let's say, onsite. For those that live in Zurich, Zurich, the city has a size of 88 square kilometer. Five square kilometer is huge. I've never seen anything like that. They're building the first factory of plant of 10 factories on this location. This is when America goes big, you know, they go big. And there are multiple projects like that taking place. say the semiconductors, say the battery drive, say data centers. We see a lot of very positive momentum, and this is new build. Traditionally, U.S. is a market where refurbishment is a dominant theme like in Europe, but this is fascinating to see that this reshoring takes place, and we are part of that, and we benefit a lot of those activities. But talking about Japan, it's a 5 billion market potential. We all know Japan is not the growth engine. It's very stable, but it's very specific in competencies. Here, we show the high-rise building that we have. helped to build in an environment that is super challenging. And they always have a different approach to challenges. And those approaches make us a strong company, contributing in Japan and taking those elements out. Our footprint in Japan has substantially increased with the three acquisitions we did in the past. We've started with Diflex, HammerTight Adhesives, and lately then NBCC adding. We are a powerhouse in Japan and we want to share that and also in April when we do an investor event in Tokyo showing how we capture the Japanese but also Asian Pacific as a key geographic for the company. India, another key geography that is on the move. I think for me most fascinating is India has always been, let's say, a continent of hope. But ultimately, what makes me confident that it is different this time is the investments go into infrastructure. Infrastructure first. The country is investing in building up the infrastructure in transportation, energy. That's the foundation of any development in any country. We see it in China. China invested heavily 20 years ago in an infrastructure that is well advanced to probably mature markets like Europe or or the US, but India is now on that move. And that gives me confidence. We all know still there's election year and this may change, but we are optimistic that the current government will continue. And so also the continuation of that investment into a meaningful infrastructure is going to be very beneficial for the country, but also for our business. This is the famous slide that I like so much. We have the privilege to be active in a market that can only grow. That can only grow because the megatrends surrounding, we need more construction. We are loving mobility. We have to change the way we build. We have to change. We move around. And for this, the world gets more developed. let's say, challenging, it's more difficult, and to navigate through that, we are the enabler. We have the solutions for sustainable construction. We have solutions to tackle raw material scarcity. We have a lot of additional, let's say, accelerating elements besides the megatrends themselves, population growth, and so on to benefit from. That's fueling our confidence in our forward-looking 6% to 9% growth ambitions. If I look into some of those megatrends, the population growth, and back here to India, it's the largest single country with the largest population. This population has huge demands in infrastructure. This example here is one of them that I compare with China, 508-kilometer-long high-speed train systems. This is helping India a lot to connect while it is almost impossible to travel. If you have been to India in the last years, that's the most painful thing. This is tackling this challenge. And more roads, train, ports, airports are in the build-up. And that's required to have a sustainable long-term growth for the economy in India. And here we benefit immediately on these big projects, for instance – where we are at 20 different locations that are along the 500 kilometers, helping to create the required concrete with the admixtures that we provide, making this fast, sweet and efficient. Another population growth, Africa, is a growing continent or exploding continent. Some of the countries have average age of the population of 20 years. I would say in Switzerland, we are a bit above that. So that's something that will trigger, of course, future needs and demands. And here, this is an example out of Ethiopia, where this is a hydropower dam that is built to provide infrastructure energy to this growing population. We will see more of that in Africa because it's absolutely... connected to the growth of the population in this area. The urbanization, Tokyo has always been a crowded place and it had limitations in going upwards, but here, you know, the sky is the limit, you know, go further, go beyond. I was very proud to be on the Skytree several years back, all this building in Japan, 634 meters, I believe, you know, That's a landmark building, but now it goes more commercial. This building here, Dasabudai Hills building, where we also will have our investor event in, is a great example how Japanese engineering is stretching, let's say, the limits, goes beyond. And we are part of that. We enable that, our solution. developed in Japan for Japan are enabling this. For us, of course, this is a possibility then to leverage this, bring it to the west coast of the U.S., bring it to Turkey. Of course, not the same solution, but we have the competencies coming from, let's say, the most challenging environment and leveraging this across the globe. So here, fantastic activities that just so we benefit, first of all, of course, quite nicely on that building, but the competence that comes with it, our reputation as being the best source when it comes to the most challenging aspects of building, waterproofing, structural, you name it. I mean, we are clearly here a leader and building further on our leadership position. We also have, not to forget, we have built systems infrastructure, commercial buildings that are retuned. This famous icon in London, the Battersea Power Station has completely been repositioned. It's now a commercial center. It's a beautiful center, I believe. I haven't been there, but I'm here. So kind of, yes, we are retuning, not tearing down and rebuilding. We maintain. There's a lot of activity going on to make this a suitable place. for the new usage of that building. And you see here some examples of what goes in there. Hidden, of course, because what you see, that's the surface, that's the floors, that's the high-rise ceilings and so on. But behind, this structure needs to be from ground up re-engineered. And for this, our solutions are first choice. I talked about scarcity of raw material and here one example is sand. I think it's clear that the old days where sand out of the river was available in excess at no cost are over. And here we have the means to make also secondary less quality sources usable and still have high performing solutions for our customers, but also for our own consumption of sand in our products that we sell. Here we have a great competencies. Again, we leverage that. It is one that is located in Lyon in France. It is fantastic to see how this center together with the other centers that we have worldwide is tapping into new alternatives and make them, let's say, compatible for the future with the chemistry that we add to those products. Send alternatives. Labor shortages, skilled labor shortages is an element that is, let's say, mind-boggling, holding things back. When I was in the U.S. early in the year, talking to contractors, they said to me, I could hire 300 people immediately. I have the projects. I don't have the people. It is a major limiting factor for contractors to find. And it gets worse and worse. And it happens not only in Europe and in the US. It's a topic in China as well as in Japan anyhow. And what is the remedy to that? We need more simple solution, easy to apply. We need robustness that you also can work with less skilled labor and still do performing a job. Technological process. I think here that the transformation of the mobility, the car industry is, I think, evident. This opens up new opportunities for us. It started with the battery, but the batteries will also become more and more a means to level out demand peaks and become part of the grid structuring. So it may be at home, it may be in larger scale also for the energy provider, a mean to offset those peaks and level. So this is just, let's say, in an evolution, and it's not yet foreseeable where it will end, but we are part of this, and we are together with those battery producers, with those energy producers. We are working on the next generation, innovating the next generation of batteries efficiency, battery reliability, and so on. Another hot topic that I push very much is digital is the future. Construction will always be with something that is tangible, but how we construct will have a lot of digital elements in there. And here you see some example on the upper left side. Our digital tools help to characterize the input materials, sand aggregates that go into concrete. With that, we can then fine tune faster. We don't need, let's say, endless trial and error, we can immediately shortcut the definition of the optimal mix design through these digital tools. Then we are following, let's say, our products in the pre-cured stage until it is in place, making sure that there is no change in performance over the time until it is set in place. The third step is then that we want to see our cured material, how it is performing over lifetime. Sensors on the roof that detect early on that there might be some leakages help to prevent major damage. renovation cost because it's too late in the tech and when it comes through the ceiling, it's too late. When it's on top and you see there is a monitor that says, here is some humidity, you can go spotwise, fix it, and you save a lot of cost going forward. The same with infrastructure, bridges. Bridges are over the 50, 80 years of lifespan, aging, of course. And if we wait too long, The costs to remedy are outrageous, sometimes even not even possible to repair but rebuild. Sensors in the bridges can and will tell us going forward when things are starting to occur that we can selectively spot-wise repair. But I call it, you know, small invest in the beginning, saving big later. over lifespan. That's the theme. Digitalization will help us to bring this to the market and say, look, with us, we fix it in the beginning so that we over time have much less cost. This is the future in digitalization that we are driving. People, our 33,000 people, it is to me absolutely the core of everything. And I don't want to make nice statements. It's just very simple. Our people are all equal. My statement on day one with NBCC was very clear. You are as much Zika as I am. There is no difference. This is day one for you. This is day, I don't know, many days. It doesn't matter. It's not we look down, look back. We are together. We are equal. And I don't want any differentiation by any characterization in our organization, you know. We are absolutely equal in all aspects and discrimination or exclusion on any aspect is absolutely not allowed. And it is also against our performance drive. How could we exclude a certain, let's say, group of individuals? You know, this group of individuals represent diversity that makes us stronger. Very simple. My drive for equal opportunity, my drive for bringing this across is is also performance related. We are stronger in our diversity. And that's my message to my organization. That's my message to everybody. This is very clear. We have to live this every day. A slide that we shared multiple times, it's to me the accumulation of everything. We had nice evolutions, performance requirements were growing in the years from the 90s into the 2000 and so on. Very clear, we went higher, we had more density. But with these megatrends challenging us, the way we are building, the way we are moving is making life more difficult, more challenging. We are the remedy for that. We have solutions, smart solutions, that help to tackle those and turn those challenges into opportunities for our customer, but of course also for our company. Great opportunities. This acceleration on this penetration curve is going up every year, going into the next 20, 30 years. I'm fully convinced, and I call it a fantastic growth opportunity. Besides that, the growing need for construction overall. And with that, I would then hand over to Adrian for the financial aspects.

Very good. And thank you, Thomas, here for giving us the highlights of the very successful year 2023, but also showing here the opportunities and the initiatives going forward. A warm welcome also from my side to all of you here in the room and the ones joining online. I will now go into a bit more granularity on the financial result in 2023. We have heard it. We have been operating in a rather challenging environment, but SICA, again, has delivered a record set of numbers in terms of sales. cash flow, and underlying profitability. Here again, the highlights. We posted a record sales level of 11.24 billion in sales, passing here the 11 billion mark for the first time, representing a 14.5% growth in local currency, 7.1% in Swiss francs. we significantly improved underlying profitability on various levels, particularly strong material margin expansion from 49.4% to 53.6, an improvement of 420 base points, but also on EBITDA level, an absolute record $2.45 billion an increase of 4.1% in spite here of a significant M&A related one-offs. Also, if you exclude M&A related one-offs at 1.68 billion or 15% of net sales on a reported basis, as already heard, 1.55 billion a 1.9% decline compared to the previous year. And on net profit as well, 1 billion and 62.6 million, a decline of 8.6%. Record operating free cash flow, this is an all-time record, 1.373 million, almost 60% up. from the previous year, very strong cash generation overall throughout the year. ROSI was impacted by the acquisition of NBCC, 16.3%, down from 21.6% in the previous year. But we have, again, as part of this strong cash generation, also showed a very significant deleveraging from, let's say, the peak upon first-time consolidation at that EBITDA level at the end of the year, already down to 2.6 times EBITDA. And then lastly, as you have also seen, a continued increase of the dividend. Here, our board of directors again proposes a dividend increase of 3.1%. by 10 Robin, three Swiss francs, 30 compared to 320 in the previous year. I will now talk about some of the elements here more specifically, starting again here on the top line where overall sales growth of 14.5% in local currencies was clearly very heavily driven by acquisitions predominantly NBCC here with 13.3% adding a clear double digit contribution to top line growth, but also organically 1.2% growth in a negative market and also with an improving volume trend, a clear improving volume trend throughout the year 2023. On the negative, Currency effects, translation effects, very significant, minus 7.4%. And sometimes it's also good to see this in absolute terms, almost 780 million of translation impact given the strong Swiss franc, the appreciation against basically all currency across the world. But also putting this a bit in context here of the last three years, again, a double-digit growth as the two preceding years with a three-year average of more than 15% of growth, different driver and elements, but I think very clearly here also showing the resilience of our business model, the ability to grow strongly also in challenging And this is due to a strong balance, be it geographically, but also in terms of maturity of the markets and many different aspects as well. You're looking at organic growth throughout the three years, close to 10% organic growth per annum, while acquisition on average contributed 6% of additional growth. If you look at the P&L and move down here from the sales line, as mentioned, very strong delivery here on material margin, 53.6%, 420 base point improvement over previous year. If you look quarter on quarter, continued improvement also here in Q4. which marked a further expansion of the material margin 55.1% in Q4. Overall, across the year, solid pricing in combination with a gradual decline of material costs, but also ongoing structural initiatives here supporting and expanding material costs. margin overall. As a small negative, there was a small PPA-related effect. We'll come to this a bit later. But also here, procurement synergies in relation with the NBCC acquisition supporting all contributing here to this strong material margin expansion in 2023. On the operating cost side, and here I'm referring to both personnel costs as well as other operating expenses, these costs overall developed over proportionally, but include, as mentioned, significant one-offs related to the transaction integration of NBCC. These one-time costs I will then detail a bit later on. when we look at the EBIT bridge. Specifically on personnel cost here, we had an increase of 17.3% with the acquisition of NBCC, including here related one of severance cost as the main contributor. At the same time, organic headcount development was slightly negative. However, wage inflation accounted for about 5% a year of personnel cost increase on a like-for-like basis, leading to negative cost leverage. Other operating expenses here increasing significantly by 31%, but here the lion's share of the extraordinary One-time costs are included also in the previous year. One-time gain on our corrosion protection business sale also affecting here and obviously the integration and acquisition cost of MVCC, 131.5 million lion share here included in other operating expenses. If we exclude These items, these costs increased by 17% largely here driven by the addition of MBCC, but also due to the general inflation environment, higher energy costs, but particularly also the fact that we didn't reduce here marketing and travel costs. We maintained here a very strong customer engagement in all market-facing activities. As a result, and including all these items, EBITDA still grew, as mentioned, 4.1% to 2 billion and 45 million. On the depreciation and amortization line, here a growth of 28.9% here, primarily related to the additional intangible amortization relating to MBCC. while the overall increase in depreciation was largely in line with sales growth. Consequently, EBIT on a reported basis, 1.55 billion declined by 1.9% from 1.58 billion. However, excluding these M&A related one-timers, EBIT increased by 80 base points, 12.7% to 1.68 billion. The various elements here of the EBIT bridge from 22 to 23 are illustrated on that side. And given, let's say, all the impacts, it probably warrants here a bit of a closer look and some more granularity behind it. Again, if we start here on the left-hand side, we've reported EBIT 2022 at 15.1% net sales and eliminating both here the one-time gain and also in 2022 acquisition costs relating to NBCC. We arrive at an adjusted 2022 EBIT of 1.49 billion or 14.2% of net sales and doing the same, In 23, on the other side of the chart here, reported EBIT of 1.5 billion, adding back here the one-time impact of 131.5 million, arriving here at an adjusted EBIT of 15%, 1.68 billion. Here it is 80%. base points improvement. But if we unpack here this M&A cost-adjusted performance, further we see a significant organic like-for-like increase in EBIT margin from 14.2 to 15.8, strongly driven here by organic material margin, while inflationary driven cost leverage was negative, as already alluded to. And then we have the NBCC contribution, which overall in absolute terms was significantly, but is coming obviously as expected with an incoming lower profitability and additional purchase price allocation effects, particularly on intangible amortization. in here with a certain dilution, the incoming dilution effect, 50 base points on the PPA, both the short term as well as the ongoing amortization, 70 base points. But we can also see here the already strong impact of synergies here, 41 million. We have heard the number very well on track and already starting to reverse here, part of the initial dilution. If you go back to the P&L and looking below the EBIT line, also here, significant impact of NBCC-related elements, net interest cost increased by 135 million, which, or are 135 million, and this represents a $95 million Increase largely related to additional debt and higher interest cost in connection with NBCC, but also on the other financial expense side here, 78 million. This is an increase of 41 million up from 37. Here, the main drivers are hyperinflation accounting, Argentina and Turkey. but also higher hedging costs, particularly related to an increased interest differential, as well as valuation effects. As a result, net financial expenses in total increased by $131 million to $212.7 million overall. On the income tax side here, effective group tax rate, did see a decrease from 22.4% to 20.5%. Overall, we are seeing a slightly decreasing expected group tax rate, but the effect was compounded by a positive one-time impact related to a change in estimate in deferred taxes relating to the former Perixx China business and the planned here legal restructuring. This has essentially then led to a tax rate of 20.5% and overall a net profit of 1,062,000,000, a decrease of 8.6%. Turning to the balance sheet, obviously also here, NBCC with an impact with balance sheet total increasing by 33% to roughly 15 billion. The decrease in current assets primarily due to a reduced but still very solid cash position that was used as a partial financing of the NBCC transaction while working capital with accounts receivables and inventories decreased the ratios, albeit on the proportionally due to disciplined networking capital management and also to inventory valuation effects here. On the non-current asset side, also here, biggest contributor, NBCC, additional fixed assets, goodwill and amortizable intangible assets, non-current assets going up from 6.3 billion to 10.85. But given ongoing amortization, but also currency effects already reducing this balance since the initial consolidation in June by more than 500 million. Looking at the passive side here of the balance sheet, the current liabilities development mirroring accounts receivable. And here, obviously, also a big change. Financial liabilities did increase due to a 2.9 billion of Swiss franc and Euro bond offering and in 23 to finance the NBCC transaction, as well as the utilization of our RCF facilities, partially offset by the early conversion of our remaining convertible bond, 1.24 billion reduction. Total financial liabilities at the end of 23, stood at 5.86 billion, an increase of 1.9 billion overall, compared to the end of 22, and net debt at 5.2 billion, up from 2.1 billion a year earlier. Equity, as a result here of solid profit generation net of dividends, as well as the early conversion of The convertible bond increased by close to 1 billion or 19 percent, representing an equity ratio of close to 40 percent. And then lastly, as mentioned, ROSI decreased to 16.3 percent from 21.6. But if you adjust this for acquisition, the increase was about 200 base points to 20 percent. 3.5% overall. Turning to cash flow, one of the very strong elements of 2023. And here we see the strong increase and the components, obviously strong profitability as the basis, but also increased depreciation amortization, which is about 102 million higher than in the previous year. adding roughly 500 million, but particularly also here networking capital, very disciplined management here, adding 82 million of cash generation compared to about 326 million of build up in the previous year. So I think a very strong and important focus on this area generating significant upside here on the cash flow side, and then capital expenditure with 273 million on a net basis, about 40 million higher than in the previous year. As a result of the strong cash generation, We have already strongly delevered here from the peak in June 23, when we showed here the initial consolidation of NBCC, where our leverage momentarily stood at 4.1 net debt EBITDA, of course, without any profitability from NBCC against it. Another key contributor, obviously, of this strong deleveraging here in the second half of 23. was the convertible bond conversion with overall a debt reduction in the last six months from a net debt reduction from 7.3 billion in mid 23 to 5.2 billion at the end of 2023. And with our net debt EBITDA ratio at 2.6 times on a reported basis. Then lastly, this brings me to the dividend proposal. As mentioned earlier, the Board of Directors of SICA proposes again a higher dividend compared to the previous year, which marks the 12th consecutive year of dividend increases. It is proposed that to increase the dividend by 10 robin to three Swiss franc 30 per share or an increase of 3.1%. 50% of this proposed payout will come out of retained earnings and the other 50% out of the capital contribution reserve. The overall payout ratio here corresponds to roughly 50% of net profit attributable to shareholders. With this, I conclude here the financial part and we will now come to the outlook for 24.

Oh, good morning, everyone. Pleasure for me to present to you for the first time on Europe, Middle East and Africa. I'm running the region now for four months, so I'm still a bit in the learning phase. But it's a real pleasure to get to know the new colleagues and to see also the opportunities that also EMEA has. You know, often it's been forgotten a bit and it's standing a bit in the shadow of But there is a lot going on. I'm amazed. And we just have to align now the organization to get to these opportunities here as well. So last year, the focus, you heard it also from Thomas and Adrian, the focus was on margin and pricing. And I think EMEA has been doing quite a good job there. And this year, the clear focus is on growth and on growth. volume. And you heard about this famous concept of go where the money is, which created a lot of growth in the Americas. I'm bringing this now to EMEA and we're doing a lot of workshops now with the companies trying to find out where these opportunities are, where is the money in the next two years, and then accordingly align the organization towards these opportunities that that are around. It's interesting, EMEA is a very heterogeneous region. So you've got the growth engines, Africa, Middle East, Europe East, and there it's very clear we will continue seeing very good, strong, double-digit growth. Also this year, there is a lot going on. And then, you know, we have the DACH region, we have also a bit Europe North, for example, where I tell my guys, look, this is where we have to create growth. Growth is not falling from heaven. We have to create it. It's maybe a little bit more challenging in these areas, but it is absolutely also possible. And there is a lot of money. I'm amazed. So infrastructure pops up all over the place. Also in Germany, I'm really impressed, you know, how much money European Union has For example, also the Deutsche Bahn, you know, they're going to invest in Germany this year and of course in the months or in the years to come to renew their infrastructure system. There is investment into nuclear plants in France. They have six projects that are ready to be built and they're talking about eight additional nuclear plants that they want to build. In the UK, they talk about The second one, these are huge projects for us. This is where the money is. Water. I mean, you've seen hydro plants projects, not only in Africa, but also in Europe, of course. You know what's going on in Saudi Arabia. This is really unbelievable. Even for an American, this is seeing what's going on there. You know, this is really, really impressive. And then, for example, data centers. Interesting for me to learn, you know, what has started in the U.S. would say three, four, five years ago is now just starting in Europe because companies want to have their data in the local company. They don't want to have their data somewhere sitting in a U.S. data center. And it's really impressive how many data centers are going to be built by U.S. companies, actually. It's interesting. Are going to be built all over Europe. all over Europe. Semiconductors, what you've seen from Thomas in Texas, these are now US companies going to build also semiconductors in Europe, in Germany, for example, Intel, I'm sure you heard about that, but it's not the only one. There are other semiconductors and these are big businesses for SICA because we contribute all over these projects. So there is money to win. In EMEA, no doubt. And of course, we're ambitious people. We will try to get as much as possible to participate here. Then the whole distribution topic, retail and e-commerce in particular. Here, we want to make a big step forward. I must say, NBCC is a very good completion of what we're doing. So in Germany, for example, we're not really strong in in retail. Now, these guys come with a strong brand, for example, PCI. You might have heard of it. Check yourself when you have a little job site at home. I'm sure you're going to see PCI branded tile adhesives, leveling mortars, tile grouts. It's a real strong brand. And these guys will help us now to build further our footprint in retail in Germany or in the DACH region here, for example. the whole CO2 or sustainability topic. It's on one side, of course, we're trying to reduce our own footprint. On the other side, we are pushing very strongly to turn this trend into business for us. And there is on the one side, the newly integrated automotive and industry business. So this is the EMEA part is now run by us or by me here also. And here, of course, I think we presented this before. It's e-mobility, it's the battery assembly. There are a lot of battery plants being built in Europe, also by non-European company or car manufacturers or battery manufacturers. And of course, the whole topic of renewable energy, wind, solar. Wind is an absolute fantastic business for SICA because we help building the blades with our industry technologies. We also help to build the molds for producing these plates. But of course, we're also heavily involved in building the tower. There's a lot of concrete involved. There's a lot of grouting mortars involved, anchoring adhesives involved. And here, Seek and I, together with MBCC, we have an absolute fantastic footprint. On the construction side, we have a very strong initiative. So we go now and visit all these companies and institutions, universities, cities that made net zero pledges. And we present them our technologies, helping them to bring their CO2 footprint down. So we have, for example, we are a leader in green roofs or, of course, also in thermal insulation of buildings, houses, etc. And we have many other technologies helping these companies and institutions to reduce their CO2 footprint. Digital lead generation, it's something where I think Europe has a bit of a backlog. This is, of course, this I bring with me from America, where we started this very early and I mean, really unbelievable, very good success we have here. You know, winning projects through digital channels where our customers contact us digitally. It's not the SICA salesperson going there anymore. It's a request coming through these channels. And we turn that then into business for us. And this is something we're going to push now very strongly also in EMEA. People... I think I said this also many times before. You heard it from Thomas. This is not just a saying or a blah, blah. This is key. And SICA is a fantastic place to work at for talented people. But sometimes we are maybe a bit too humble, too Swiss, and do forget to talk about it also towards a bit the outside in social media. And this is something we want to do a bit more strongly here now in EMEA. We have a project which we call Cool SICA. So we want to really position SICA as the coolest place to work for in the industry among, let's say, talents coming from universities, et cetera. And last but not least, NBCC integration is progressing very, very well. It's a pleasure to work with these guys. Originally, we thought they had come with a different culture than our culture, but it's totally wrong. I think they were just waiting for being part of a company like SICA where they can – live their, their entrepreneurial culture, their professional culture, uh, much stronger than before being part of a huge conglomerate. They're never really knowing what, uh, what's going on. It's super professional people. They know what they're doing. Uh, they have very good products, uh, actually in the combination now, SICA and, and, and NBCC. And that was always our target is making this one plus one, uh, uh, three, no doubt. So, uh, very well progressed and, uh, pleasure to see how this is now further, uh, developing. And I think now we go to Asia. Americas, I'm sorry. Hey, Mike.