Sika Ag Adr

Good morning, I think everything has been said in the video, are there any questions? No, I think a great introduction, but at the same time as in SICK we start for now three years every meeting, every event with a safety moment also here, before we take off like in the airplane, just a little reminder, we don't expect to, but if there is any emergency, then please be reminded in the back there are the exits, the emergency exits, and then from there to the left and to the right to leave the building. So now let's buckle up and then get started. And I think here to start with the theme, oh, it doesn't show here. Can you make it on the screen as well? Okay, I just, okay, now it's here. So, at the end of today, we have great results we want to share with you, but at the same time, we would also like to emphasize Zika is stronger than ever. stronger than ever on multiple access and started with the sales growth. When we look at the past five years, we've given all the uncertainties that we had with COVID, with the supply chain disruption, with the integration of the largest ever transaction in CITES history, we have increased our sales year over year significantly and significantly also outperformed the market and our peers. It's a promise also for the future, that's the heritage of the company growing. But not only growing on top line, but also of course That's a must for us also to increase our EBITDA, our profit generation in absolute, but also in relative. With 19.3%, an all-time high has been achieved in last year. Again, stronger than ever, that's the base for 24. And it's important to reflect a bit regarding the last four years or five years. The jump in net profit of 17.4% of last year compared to prior year, but when you look also in retrospect the five years with all the one-time costs that came in with all the, let's say, the adjustments, it is a steady improvement. It shows that we are working for profit, that we are working to have a healthy net profit baseline. We turn it into a more relevant for shareholders earning per share ratio. We have increased almost 50% over the years. And, of course, here also with the bonds that we are converting last year or in 23, you know, when you look, this is behind us. It's a steady improvement on the EPS, 49%, 7.76% from roughly five Swiss francs per share in 2020. Again, underscoring our long-term value to the shareholders. On the dividend, here we just showed the last 10 years, it's 200% growth on the dividend level. And our dividend proposal will be explained by Adrian later on. But also here, we can go even further back. For the last 25 years, in average, the annual increase in the dividend has been double-digit. 25 years, average increase, double-digit for a company. Now, let's look a bit more into last year's key achievements. And here, I would like just to emphasize, I think, the sales number we have communicated by the regions, America's 11%, 7%, EMEA, and Asia-Pacific 2.4. But just to remind us, EMEA, for the first time, crossed the $5 billion mark. America's, for the first time, the $4 billion mark. And I was checking a bit our history here. And it is in 2007 that the whole group crossed 4 billion. It is 2013 that the group crossed 5 billion. And we are close to 12 billion now. This is the significant growth pattern that we have that is also represented in last year's sales records. And it is also our future vision, growth profitably. We are not alone. We have others as well. We compare ourselves to the peers. We have shown this slide several times. We are outperforming our peers more than 2%. These are the nine months results of our peers since we don't have yet all the numbers. We expect this gap even to further increase a little bit when we have the full reports available. Outperforming the peers outperforming the market, market share gain, profitable market share gain, that's the DNA, that's what we are driving for and this is also a testimonial when we compare with our peers that we are doing that consistently. Then let's talk about the core of the success. I'm standing here, I have the privilege to represent 34,000 employees that have generated the results that I can share with you. It is this workforce that has a super high dedication and identification with the company that goes very deep. This has also been reconfirmed with the employee engagement survey last year, with a very strong 86% engagement level, considering that Some of the MBCC individuals have been less than nine months before the survey came through on board. So this testimonial also on how the MBCC integration from the get-go has been well received and underlined with this super high engagement score, which is the foundation of everything. It is not me that steers 103 countries. It's the country leaders with their teams that are excelling the market condition take opportunities everywhere. We support them, the regions, we from the group, we support them, but ultimately the heavy lifting takes place in the countries with the support from the regions and from corporates. Talk a little bit about safety. In 2001, when I took over, we reflected a bit on our employee, our workforce that is so engaged, and we realized that our safety score is actually not matching our aspiration. And it became then a journey for all of us to say, it cannot be, we have to improve. And you see here also how the organization has improved. built on that and has reduced the accident rate significantly. That's an amazing journey and it comes from the organization. In the employee survey of last year, safety has been the single most outlined highest priority topic in the organization. I'm very proud of this achievement because this is not something you can dictate top down. It comes bottom up. So this message has found roots and it is a cultural aspect now that is lived every day and that we are very proud of as a safe work environment is protecting not only our employees, it's also, let's say, a well-structured work environment. It's an efficient work environment. It has multiple benefits on all angles. But first and foremost, we want our employees to go home healthy as they come to work. On the non-financial figures, we also have a set of impressive achievements As mentioned, the safety, 36% in a single year reduction in accidents per 1,000, but also the other, the waste reduction, which is a key target of our mid-term strategy. The CO2 emission reduction on Scope 1 and 2, minus 10%. Water discharge, minus 7%. So we're working on the financial as well as on the non-financial as outlined in our strategy, and we achieve or overachieve, actually, our targets as we speak. But, of course, you also have our set of financials, and I think here Adrian will go further into the details. Maybe one point that I would also highlight here is, of course, the improvement on the material margin, which is significant, giving us a boost on getting us into the 54% to 55% range. That's our target range, but we are right spot on in the middle of that range, and more light into that than in Adrian's explanation later on. I would like to reflect a bit, this has been the first year of our strategy 28, and what does that look like? This is our strategy, the new strategy we announced in October 23 and 24, the first year. How have we performed according to our own strategic targets? This is the slide that explains almost everything. We have here an ambition to grow 6% to 9% in top line. We grew 7.4%. We have an ambition to grow into the 20% to 23% EBITDA range starting next year when the full MBCC integration has been materialized. We grew from last year to this year from 4%. 23 to 24, 110 base points, making major steps towards the 20% goal that we want to achieve next year. So here, a year of the five year that indicates we are well on track with our strategy implementation and that is based on the strength that we have with our portfolio. We have the eight target markets and you see that all of them are substantial contributing to the overall performance. They are between 10 and 20% in contribution. So we don't have one major one that is, let's say, overshadowing all the others. This is a set of, and when you look into the target, these are all solutions, solutions for waterproofing, for sealing and bonding, concrete solution, flooring solution. These are our products, our innovation that are... represented very well across the total top line, and this is then transferred into the cross-selling solution for the specific verticals. For commercial projects where you have waterproofing, where you need concrete, where you need interior building finishing, where you need all this solution, all the target market solution, the cross-selling, at the end comes to the point where it goes into action with the specific project. This is on infrastructure, residential, commercial projects. And also automotive and industry is benefiting from multiple target markets that we can sell into that segment. So we have here the eight target market, but then we focus on the final customer, which are then segregated by the key verticals as outlined here. Significant cross-selling that we can place. We have not a single... target market or single vertical dependency. We can balance that and we can cross sell nicely into these vertical markets. M&A has always been a key contributor and remains a key contributor. And here you can see the funnel also over the last five years where you see what are the basic reviews. We are doing what goes into a more concrete phase into non-binding and ultimately into an execution. And here also, the year 22 and 23 have been years where we were a little bit more engaged with antitrust authorities across the world, which was limited with our, let's say, possibility to pull through, but it's behind us. Last year, we came back, we are full steam into bolt-on, small and mid-sized acquisition, and more to come. But we had a bit of an impact as we went through this antitrust approval process in 22 and 23. And you see, 16 acquisitions executed, one, of course, NBCC, that's special, but 15 bolt-on. That's contributing, and that's also going to contribute, of course, in the future. Then, be a bit more specific about NBCC, a wonderful performance-enhancing acquisition. Of course, also a lot of work. A lot of work that has taken place up to now, but it is worthwhile. We generated 125 million synergies, more than we initially have guided for. It is, of course, helping us also. NBCC came in with a much lower turnover. EBTA ratio, and we have lifted that almost to the level of SICA in the meantime. So, very quickly, this acquisition has, from a dilutive, also a high integration cost, become a contributor in 24 already, and Adrian is going to show that in more details. And going forward, the strongest platform ever. This is the power of SICA. The integration is not complete, but it is behind us. The focus is on the market. The focus is on using the full power, the full power of the people, the footprint that has substantially expanded. The integration that makes us stronger on local level, bringing us cost synergies, bringing us portfolio synergies. We have the strongest portfolio in the industry by far. It is also... branding-wise, fully integrated. Here we were forced by the regulators, and this is one of the few points where I thank them for forcing us, because this is now realized, we have one portfolio, we have a clear way forward with the strongest portfolio, the best of both worlds for our organizations going forward. Now, a few examples of the strong business execution from last year but also going forward. I think here already in the video it has been shown a few examples of outstanding infrastructure projects. The longest cable bridge in North America. I just missed it. I lived five years in Detroit, so that bridge would have helped me a lot to get over to Windsor. But it is now realized, it is one of these, let's say, mega projects, just like also the Montenegro Highway, which has an impressive, let's say, contribution from high value projects like the tunnels and bridges on a 41 kilometer stretch. The whole highway is going to be more than 160 kilometers. And there will be more and more bridges and tunnels to come in execution until it's finalized. Then the Thames Tideway Tunnel, the biggest, largest sewage tunnel you have. seen it in the annual report or you will see it, it's a substantial improvement for the sewage system in London and London is just an indication what is going on in mature markets. We have huge backlogs there in sewage system and now you can say the UK has been challenged economically and the spending in this takes place, so this spending takes place under all That's a better condition, and it's a great example also for SICA, how we can still advance and grow even if markets are a bit more challenged. Data centers, we talked about data centers excessively, and I think rightfully, because it is clear that digitalization is changing industries, it's changing the way we do business universally, but for this the infrastructure is crucial. These are the micro, these are the semiconductor, the microchips, these are of course the data centers where the data are aggregated. 700 billion Swiss francs are going to be spent in the coming years. And SICA has been a forerunner in specifying reliable, durable, and sustainable solution for data centers. And I can proudly say still today, in more than 50% of the project CKEs in the data center. Because we were early movers and we are using that early mover status to penetrate. And these are owners that are focusing on having robust infrastructures that are not at risk to shut down because of a leakage, because of a construction failure. And they are focusing on the best in the industry and we are the best and we are with them and we help them to execute this massive number of data centers globally speaking. Innovation at the core of our company. A few examples that we also highlighted at the Capital Market Day. When we look at the concrete business, there are multiple significant improvement possible that are actually reducing overall cost for contractors and owners like the reinforced fiber approach that is also reconfirmed by the World Business Council for Sustainable Development. When we replace steel bars with fibers, we have multiple positive effects. The costs come down, labor is reduced, the durability is increased, and the CO2 footprint is reduced. These are great examples of win-win-win. Concrete recycling, a lot of concrete in the evening comes back, half-emptied trucks. which are a burden for concrete producers. It's 500 million cubic meters every year that need to be dumped, cured, and it's waste. With our innovative solution, we can reutilize that so-called waste and bring it in in quality concrete and not downgrade it into back-filling material or into cured concrete road, And excellent, again, this is value for our customer. This is cost-saving. Less waste means less concerns with the waste, but of course it is also higher utilization of the valuable ingredients, the raw materials that are the base of concrete. Self-healing membranes. If the products can absorb certain defects by themselves, it's a smart way to overcome early repair or replacement. These are high performance, high quality, durable products, which again, in the long run, for customers that make the full cost approach to their construction of the building, have immediate clear benefit of investing into such a top quality membrane at the beginning. But also in other areas here, a good example, the specialty floor systems for the electronic, for the semiconductor business, super important that the floor is not influencing the production line. Here we have outstanding best in class innovation, patent protected of course, that are in the specifications of those global leaders. That's another innovation that is materializing, is expanding, just as an indication for the innovation power of SICA. Salmon-free tile adhesive. Reducing salmon is one. Eliminating the Portland salmon completely is another. This leads to a 50% lower CO2 footprint for the final product. And here, again, it is coming with additional features in workability. It comes with attractive offers to the end user. And it is a best-in-class demonstration, again, on this, let's say, tile adhesive market. Digital. I mentioned it. Digital solutions. The digital solutions that are going, let's say, outside and inside Zika at a fast pace. I would like to highlight here maybe on the transparency side. When I had the pleasure to lead the R&D 10 years ago, we were connecting all our R&D to 20 global centers. We were creating a spider net with multiple hubs connecting. But at that time, our platform was, let's say, one single platform where the results of our work was shared. Nowadays, we can actually take all the data points that create these results, the test, the trial and errors, all this that are super relevant to get to the result, all this is now available globally and we can use these millions of data points that every day are generated across all our R&D labs and we can learn from so-called failed experiments which create a feature that was not needed for this result, but now we have, through AI, the possibility to selectively learn from every day's experiments. This is super powerful, high expectation. We introduced it last year. That's the way we are using AI as a simple example. But also for our customers, to provide our customers tools that they are more effective, being faster in analytics of the aggregates they are using, helping them with the mix design to be faster in finding the optimal mix design. These are concrete apps that help to make life easier for our customers. Then we talked about the cycles in construction, building, renovating, tearing down. Now dialing into the lifetime, having monitoring devices helping us to follow the structures over lifetime and seeing early on when repair is mandated and do it early on before we have catastrophic failures or major renovation. This is the future to stay connected with the buildings, with the structures and track over lifetime and so bring also total cost over lifetime down with a few extra spending in the beginning, you have this possibility. And then, of course, we are just at the beginning that all the status that we are generating with our outside, with our customers inside, as mentioned with R&D, to unlock here future innovation and collaboration, generating new opportunities for Zika. These are a few highlights that I wanted to stress out here, but now we've become much more concrete on the financials and hand over to Adrian.

Very good. Thank you, Thomas. And well, good morning to everybody here in the room and the ones joining online. Well, Thomas has here presented the highlights and I think our strength in our first strategy, 28th year in 24. I will now go into a bit more detail on the financial results. And you have seen it, SICA has again delivered a strong performance. set of numbers in terms of sales, in terms of profitability, in terms of cash flow, in quite a challenging overall business environment. Here again, the highlights, net sales of 11.76 billion, new record in 2024, 7.4% growth in local currency, and translating into Swiss franc growth of 4.7%. A further improved profitability on all levels. Thomas pointed out here the expansion of the material margin to 54.5%. This is up 90 base points. Also record EBITDA with 2.2%. 7 billion or 19.3% of net sales representing an over-proportional growth of 11%. Also an EBIT level, strong EBIT growth, 10.6% of growth here to reach 1.71 billion, also here representing a strong increase and on net profit level, 1.25 billion or 10.6% of net sales this is an increase of 17.4% also strong cash generation continued strong cash generation 1.4 billion in operating free cash flow in 2024 also a component to further deleverage our net debt EBITDA ratio decreased to 2.2 times from 2.6 in the And lastly, the Board of Directors again proposes an attractive dividend increase of 9.1% to 3 Swiss francs 60. This is up from 3.30. Let me now talk... about the individual elements a bit in more detail. Here, starting on the top line, you have seen it, 2024 growth was largely driven by acquisitions, predominantly NBCC, an additional four months of consolidated sales, but also three bolt-on acquisitions in the Americas, which overall contributed 6.3% of local currency growth. but also organic growth was positive at 1.1% with an improving volume trend throughout the year. The second half of 24 show the 1.7% organic growth. Foreign exchange impacts, negative one softened a bit towards the end of the year, but also here contributed a negative 2.7% in terms of top line or minus 311 million in absolute terms with a resulting overall Swiss franc growth of 4.7%. Sales growth was again very solid at 7.4% in local currencies also comparing quite well if you look across for example the last five years and I think again showing here the strength of the strategy and the resilience of our business model with the ability to grow also in challenging environments. And if you look across the five years, average organic growth at 5.3% and an additional acquisition growth on average of 6.3% over the last five years. Moving down here to P&L from the sales line, we delivered, as said, a strong expansion, a further expansion of the material margin with gross result expanding by 90 base points from 53.6 to 54.5%. Declining yet flattening input cost, material cost, as well as many structural procurement initiatives also partially MBCC synergies led to this increased material margin dilution effect coming from the bolt-ons was quite small at minus 10 base points only and material margin looking a bit across the year in Q4 was slightly above Q3 and in line with the normal seasonal pattern where we have a somewhat lower material margin in the second half year. In looking at operating costs, which include both personnel as well as other operating expenses, here these costs increase slightly proportionally to sales growth at 4.2% versus the 4.7 top line, and this in spite of here in inflationary environment, particularly related to wage inflation, which was offset by strong NBCC cost synergies, operational efficiency initiatives, but also lower NBCC-related one-time costs, which were significantly higher. in the previous year. NBCC cost synergies and operational efficiency initiatives had a particular impact in H2 with operating costs decreasing in absolute terms in the second half of the year. Specifically in terms of personnel costs, here with an increase of 6.8%, here slightly, over proportional additional impact of NBCC as one of the main contributor. And secondly, as mentioned, underlying wage inflation accounted for about 4%. This is down on the full year from around 5% in the first half year, but still with quite an impact. but much reduced, particularly in Q4. And here the wage inflation was partially offset by cost synergies as well as other operational efficiency initiatives. Also here, correspondingly, Q4 saw an under-proportional personnel cost increase. Other operating expenses increased under-proportionally by 1.5%, here driven by lower acquisition-related one-time costs, but also here, synergy development, operational efficiency initiatives were quite important. Like for like, other OPEX growth in Q4 was negative. And as a result, as mentioned, EBITDA strong increase by 11% to 2.27 billion, or 19.3% of net sales, which represents an all-time record margin. Now, sort of dissecting this a bit in terms of the individual components here, the EBITDA bridge of 24, starting on the left-hand side with reported EBITDA of 18.2% in 23, sort of adding back the one-time costs of last year, to a normalized 2.17 billion or 19.3%, doing the same thing here on the right-hand side in 24 with much smaller one-time costs here, 19.4% normalized profitability. And if we break down here the underlying performance, we saw an organic material margin increase 70 base points and an over-proportional or primarily wage inflation driven material cost increase providing for a negative cost leverage of 90 base points. But this 90 base points is significantly down from the first half year where we had minus 150. Then, NBCC, well, initially the first four months, again, contributing an initial dilution of 30 base points, but here you can see the incremental synergies this year of more than 80 million, strongly overcompensating this with a net overall contribution of 30 base points to EBITDA development of the group. As mentioned by Thomas before, integration is going extremely well. 125 million of synergies achieved, even slightly above the increased synergy guidance for 24, which was 100 to 120 million with a good traction overall. Now, moving back to the P&L and Looking here below the EBITDA line, depreciation and amortization expense grew by 12% or 60 million in absolute terms to 556 million. This is primarily due to higher intangible amortization relating to NBCC. Again, the first additional four months of the year and the consummated bolt-on acquisitions. Organically, the appreciation and amortization expense was largely in line with organic sales growth. And as a result, EBIT increased here by 10.6% to 1.71 billion. In looking at the lines here below, EBIT here in combination, significant decrease, but in looking at interest expense individually here, an increase of 24.5 million compared to the same period of last year. Here the increase is largely due to an additional quarter of NBCC-related financing, primarily through the issuance of bonds. interest costs, however, have started to decrease in the second half year, the result of ongoing repayments of some of the bonds. I'll come to that a little bit later. By contrast, other financial expenses, which also are part of this interest and financial expense line, here we had a significant decrease by 86 million. This is primarily due to hedging gains on currency swaps related to swapping Euro denominated bonds into Swiss Franc bonds as well as lower foreign exchange valuation and hyperinflation impacts. resulting to this significant increase overall of total net financial expenses, here an increase of almost 30% to 150.9 million. Talking about here the tax rate quickly before we come to the balance sheet, also tax rate decreased by 30%. base points from 20.5% to 20.2%. Here we also had one effect relating to deferred tax benefits on restructuring, which was partially offset by higher withholding taxes on internal dividends. Now on the balance sheet, overall we saw a balance sheet extension in 2024 with balance sheets total increasing by 6.2%. This was largely due to a weakening Swiss franc at the end of the year with foreign exchange translation effects close to 500 million of this roughly 16 billion total. In looking at current assets, here the increase is due to a higher cash balance, but also some networking capital items, particularly here also impacted by foreign exchange and also somewhat higher accounts receivables relating to mix. On the intangible side here, the increase of about 400 million is largely due to foreign exchange translation effects. If you look at additional goodwill and intangibles from the bolt-on acquisitions, they were pretty much in line with ongoing annual amortization. So the impact is all foreign exchange driven. In looking at the liabilities, here the shifts are primarily related to financing and de-financing activities and the duration of the respective instruments. During 2024, SICA repaid four expiring bonds in the total amount of approximately one billion and took out in the second quarter of 24, 400 million of Swiss franc bonds at overall lower cost. Total financial liabilities at the end of 24 stood at 5.7 billion, a decrease of 110 million. If you look at net debt here, the decrease 180 million to 5.0 billion in December 2024. And shareholder equity quite a significant increase obviously driven by net profit growth, net of dividends, but also here currency translation effects had a positive effect, the 19% increase of equity to more than 7 billion overall. Return on capital employed here also impacted by the acquisition of NBCC as well as foreign exchange. Translation impact decreased to 14.2%. Acquisition adjusted ROC is at 22.1. Now turning to cash flow. Here again in 24, strong cash generation. If you look at operating free cash flow, 1.4 billion. Slightly down from the previous year here. Driver overall strong and increased net profit before tax at 1.56 billion. Also higher depreciation and amortization expense by 60 million. This was offset by Higher networking capital of 163 million, which compares to actually a reduction of last year of 82. And also modestly higher capex of 340 million in 2024. Also slightly higher cash taxes overall. This also here having quite a positive comparison to our targets of 10% of net sales here for the second year, strongly above. And obviously operating free cash flow also driving here. you know, leverage down from 2.6 times to 2.2, where we showed, again, quite a solid deleveraging profile. And this is a continuation here also of the deleveraging since the first time consolidation of NBCC in mid-23, where the leverage stood at 4.1 times now. down almost two turns at 2.2, very similar to the 2019-2020 phase where Parex was acquired, also showing a very strong deleveraging profile at the time. This brings me to the dividend proposal. As mentioned, the Board of Directors proposes again a higher Dividends compared to the previous year, it is proposed to increase the dividend by 30 European per share from 330 to 360, which represents a 9.1% increase. Again, as last year, 50% is proposed to be paid out of retained earnings and 50% out of the capital contribution reserve. Overall payout ratio corresponds to 46.4% of net profit attributable to shareholders. With this, we would continue with the outlook for 2025. And I hand over to Christoph.

All right. Good morning, everyone. So I would say giving an outlook on 2025 on EMEA is a bit like crystal ball reading because we have a lot of open factors, which we don't know exactly how they're going to turn out.