Sika Ag Adr

Excellent. Good morning and a warm welcome for all here in the room, visible, and also a warm welcome to the invisible that are virtually joining our media investor conference. I think the short video has brought everything to the point, and I will go and bring more, let's say, details into it, but it has been very well, let's say, aggregated here. But before I start, I would also like to share my sincere gratitude with our 33,000 employees. Many of them are also following this call here, and it is really amazing to see how committed and engaged our employees have supported the company. with the many initiatives globally in 2025. And it is also, let's say, the source of the strength of the company in delivering in tough times, also outstanding results, shaping for the future with the support of our employees. That's what makes me feel proud to be at the top of the company, but representing 33,000 employees. Now let's look at the agenda, which will follow the sequence of sharing some of the highlights of 25 from my side, but also then give some flavor to the strategy execution. And then, very interesting, how are we doing on the business implementation, key elements which are driving growth into this year as well as into the coming years. also supported then by the regional manager, Christoph, Mike, and Philip, which then will also give us a bit of flavor on what's going on in the regions. Before then, Adrian is going to make a deep dive into the financials of 25, then followed by the outlook for 26, as well as then the Q&A session at the end of the session. But I think before I go on, Into the highlights, I would like to emphasize here the strong foundation that SICA is built on and is able to also then outperform the markets, increase profitability in the future. And I think most prominent, Sika is the undisputed leader in the chemical construction market by far. This gives us a leading edge access to big project access across the channels as the brand stands for top performance, top value and is recognized as a clear benchmark and wherever in a challenging environment where complexity is increasing, SICA is the first source to go to, to help the specifiers, to help the architects, the contractors to overcome those challenges, because they can count on us providing value-add innovation to overcome the pain points of the industry. This, of course, is what we bring to the market Inside, it is this innovation drive constantly challenging status quo. Always look what is out in the market challenging our customers, our contractors, applicators, and see how we can remedy those pains with intelligent, innovative solutions, helping them to overcome those complexities. This is a key element here. which we also see represented in the appreciation of our customers when we look at the net promoter score that Zika has clearly ahead of anybody else in the market. At the same time, talking about the market, construction market is a market that has a lot of influential elements in there. The higher the confidence in the future, the more investments flow naturally into construction. We are facing a period of a lot of uncertainty. Therefore, let's say markets are hesitant to invest, not all of the markets, but some of the markets definitely. And it is dampening, let's say, the construction market. activity short-term. It's the cycle that we see that is influencing, let's say, the markets overall, but this is also an opportunity. A down cycle is an opportunity. We took this last year and we installed an efficiency program, a productivity program, providing our organization a leaner and a more agile structure and also investing into digitalization as a key driver for future differentiation potential in the market with a clear aspiration to be in our market the digital leader just like we are the innovation leader market leader we drive for digital leadership and this we took in in 25 and we will see also how nicely it will generate the potential for us to outperform the market and also to generate the margins increase. The organic growth traditionally and also ongoing is paired with our hold on M&A strategy. We have a fantastic track record over the past 15, 10, 15 years with many, many bolt-ons. And we will show later on a bit the flavor of how accretive and how strong the integration power of SICA is. This can be anywhere on the planet. This can be a mature market. This can be an emerging market. We have here clearly also established a skill set to spot the most attractive prospects and then engage clearly based on KPIs that are oriented towards return generation and synergy generation and accelerating growth, then the best one for transactions. And then when we close, we instantly step in and drive then the integration and the synergy and the expansion of the business via cross-selling, via channel integration, activation and leveraging our global portfolio. So this is the foundation. This is why we are very optimistic and very confident about our ability to outperform the markets, as we have also stipulated in our midterm strategy by three to 6% in local currency. Now talking shortly and briefly about the markets and the fear starting probably with where we're Exactly probably a year ago, we were guiding before the tariff, let's say uncertainty was revealed and which had massive impact on the North American, but also ripple effects across the globe with uncertainty related to tariffs going up and down. This has been a sentiment that has stayed for decades. for 25, which then also triggers into lack of consumer confidence, further increasing in China. As you can see, almost 50% of the residential market reduction within two years, very much also here linked to the uncertainty of the global markets, which has also then triggered our reaction to the Chinese business. And towards the end of the year, As if not needed, another element that came with the longest U.S. government shutdown that, again, was hindering projects to start, waiting for permits, waiting for approvals, which was, again, an element that was unforeseeable. But it is what it is. Overall, we conclude last year's, for us, relevant market had a roughly decline of 2.5%. given all these elements. Nevertheless, that's where we come into our performance and here our outperformance of the market with a 0.6% growth in local currency is a demonstration that even under severe, let's say, weather conditions, the company can deliver. Also on the operating If we take in consideration also the steps we took with the fast forward program, only a slight decline in the operating margins, while we of course see negative leverage with a low organic or negative organic growth rate. Very obvious here also visible, the strength of the Swiss francs has been once again, let's say the translation effect. But of course, when we look at the report and numbers, it is quite heavy with 5.4% FX implication in 2025. I talked already a little bit about the actions we took. The market is soft, it's muted, but at the same time, this is the time. This is the time for strong companies to act, to prepare, because every cycle comes to an end. And we took the decision in the second half last year to shape the company, not only in China, where we have been rebasing the business, but globally to say, this is the opportunity, this is the time. where we can and must take proactive steps, making a leaner, more agile organization, also investing into our operational footprint in automation and efficiency to be able then also to kickstart when, the cycle turns up and take advantage of ready to roll organization. We paired it also with investments on the digital front as the digital journey can be accelerated and we took the decision here to fast forward our digital journey with clear elements that we will show later on also in transforming our business more digital and aspiring for the digital leadership in the industry. And all these investments come with a fantastic return, you know, less than two year payback and up to 100% return on the individual investments. Now, when we look into the regions and here, If we look at the outperformance of the markets, 2.2% in local currency was the growth in EMEA. In EMEA, very clearly, we have pockets of growth like the Middle East, Africa, Central Asia. We have parts of Europe that showed improvements towards the end of the year, Eastern Europe, the parts of Southern Europe as well. So here, momentum that has built up and is then also demonstrating our outperformance in EMEA's. The Americas, our second largest region as well, had a strong start into the year. So, January was fantastic. February, until about the time of the month as now, was still going in the same traction. We had good momentum coming from 24, building up momentum. Unfortunately, that was then softened over the course of the year. And there is also still a prevailing sentiment in the Americas. But in the Americas, we also have great pockets of growth, like the tech investments. The investments into data center is booming with, let's say, increasing the commercial construction spent quite tremendously while other commercial constructions are lagging so the data center boom and our strong position as a forerunner and as a peace of mind provider to the owners and the hyperscaler give us here a leading edge and just to give that a bit in perspective, you know, we have been participating in over 4,000 data centers globally so far, and let alone 400 last year, thereof 230 in the Americas. So this is a pocket of growth of substantial contribution. Besides that, Latin America, the markets are more resilient, just like other emerging markets have demonstrated here, more resilience to the global uncertainties. Which brings me over to Asia Pacific. Asia Pacific reported a minus 5.2 in local currency. If we take the China construction market out of the perspective, it would have been a growth of 2.9% in local currency. And here, as I mentioned before, very much driven by strong momentum in Southeast Asia, in India, that is partially offsetting the weaknesses in China. Now, when we talk about outperformance, outperformance of the market, a market that has been roughly 2.5% down, we compare us to the peers. We have established this peer comparison for quite a while. And as you can see here on the left-hand side, if we take in all the relevant peers and their activities in the construction chemical market, we are outperforming our peers by roughly 2%. In 25, we don't have yet the full set of numbers, so this is still work in progress and we'll probably also then shift a little bit as Q4 was not only for SICA a challenging quarter, it was also for our peers a challenging quarter, but more relevant. None of our peers that are in this list here is really active in China. So when we take, let's say, the comparable geographical spread of the peers and us, then on the right-hand side, you can see the outperformance consistently being almost close to 3% to the peers, which are in our expectation also slightly above the market trends. Now, some of the highlights which we are particularly proud of is the increase of our gross margin, our material margin increased to 54.9%. This is a testimonial to the strength in value selling. This is the value that we bring through our innovation into the market. We are recognized as a value provider and the return of our customers by utilizing our products, our innovation is speaking for themselves and is driving this material margin progression in 25. But as you can see, also coming from 23 to 25, steadily increasing our material margin. I think a particular strength of the company is the strong cash generation. Also, in light of, let's say, lower EBIT in absolute numbers, driven by the one-time effect of fast-forward, as well as the strong currency. But when we looked at what the company constantly delivers in the last three years, solid double-digit returns in cash, which is almost $1.4 billion that we can then redeploy into investing into our business, giving it back to our shareholders, as well as investing into bolt-on acquisitions. So that's underlying, I think, an element of strength that we are also capturing going forward. Another highlight we have not talked so much about, but our aspiration to be leaders in the industry is not only on financial targets oriented. It is also our employee safety. In 21, we launched a program. We set the high mark and say we want to be leader on safety for our employees. And as you can see, this is a journey. This is a journey which gradually improves. And in the meantime, we have reached clearly above industry average standard. But we are not stopping. We want to make SICA successful. the safest workplace in the industry and we are investing heavily together with our employees to create this safety culture which is progressing very nicely. It makes me very proud that our employees are supporting this journey as this is not dictated by top down, this is ground up supported and this is also when we look into What it means behind, let's say, the numbers, it means a safer and more, let's say, streamlined and more process-oriented and more, let's say, transparent organization, which leaves less up to chances. And that's, of course, also a value driver for other stakeholders, as this is part of – getting transparency and getting efficiency throughout the organization talking about the non-financial metrics i think we can be proud we are constantly delivering on our non-financial commitments on the greenhouse gas emission reduction scope one and two the ones that we heavily influence the water discharge reduced by three percent Waste disposal by 5.7% and as mentioned 14% on the safety side. These are all value accretive elements which are transferring into efficiency, into tangible also financial benefits for the company and its shareholders. Talking about the other element, the organic element, very important, reinvesting into the organization, investing into safety and so on. It's the bolt-on acquisition strategy. We have been able to sign seven and close six of the transactions in 2025. I think here most remarkable also, as you can see, two of them in the Middle East. This is a booming area. This is a double digit growth area where these two acquisitions are spot on not only bolt on their spot on to to market demands that are also expected to continue to grow in the near future we also made a bold move in scandinavia with two transaction giving us here on the mortar side a very strong footprint And as you may recall, we have a very strong adhesives and sealant footprint in distribution in Scandinavia. We are combining these two strengths and also aspire to be the undisputed leader in distribution with our strong brands in Scandinavia. Here also very clear value and growth-driven acquisition, which the others then also supporting mature markets like in Singapore, or HBS in North America. We invest in our own capabilities, our factories. Here, some of them are expansions into demand-driven geographies, like in South America too, like North Africa, Morocco, the booming economy, also here covering more space in that country. Kazakhstan, as I mentioned, Central Asia, the booming area, but then also in China. And here maybe I would like to elaborate. Sucho is our main site. It's our headquarter close to Shanghai. We have opened the factory for adhesives and sealants for the automotive and industrial manufacturing business. We have great success. The plant opened in the second half last year. And we are gaining share with the Chinese OEMs so that we are already now considering a further expansion of the capacity. As we see, with this fully automated, with this state-of-the-art, we are having good traction with the Chinese OEMs, bringing them top level. global innovation into their manufacturing processes. And it's just an example of our constant investment also in upgrading our operations, our footprint and gain more efficiency and productivity. Now, let me quickly look in the last six weeks. I mean, here, the year just has started, but I think it's remarkable how the year started, because in the first six weeks, we have opened already five new additional plants, and that's just mentioned before, very much demand-driven. We have a very strong concrete market in the south. East of the US, so Florida as a booming area, we put the most modern plant down for ad mixture with fully automated capabilities in the plant near Orlando. We then also expand in Latin America, in Colombia, and in Argentina, which is a constant growth platform for us. Bangladesh in Southeast Asia, as well as in Africa with a new plant near the Victoria Lake, 800 kilometers away from our headquarter, also covering this strong growing market there in the East African market. Again, very exciting. I think we reported that just lately, the acquisition of Akim in Turkey. Turkey is a powerhouse. It's an engineering powerhouse. It's a powerhouse that is very influential in the Middle East, in Central Asia. This company has a fantastic footprint. has also a foot into Romania, so in the Eastern European market. And we are very happy that we are now able then soon to build on that platform, bringing our expertise, our technologies from the construction chemical side together with the sealant and the adhesives into the core markets of the Akkim and in reversal also bringing the Akkim products into the Zika world, into Europe, into other parts of the world as they perfectly fit our portfolio. for distribution and as mentioned before the the seventh transaction of last year closed the end of january so finia was a fast track acquisition signing early december closing end of end of January and it's a sizable excellent platform which we are utilizing now also to drive above market growth in Scandinavia and utilizing this to leverage our synergies into the market. Maybe a short segue into the adhesives business. We haven't talked that much about the adhesives business, but it is underlying representing about 30% of our business. It is relevant or mission critical in all our markets. It's in all channels, has a very predominant position. It's an enabler. It's a typical enabler to move from traditional bonding techniques to techniques that enable multi-material structures that enable also smart decarbonized buildings. So it is a key element on the journey of all this technology. and it comes with very attractive innovation driven features where we have here a clear leading edge providing here state-of-the-art innovation like the curing by design that is enabling our customers to advance their design and their construction manufacturing processes. In the adhesives field, it's all about the brand. If you go from DIY over to the Big box, if you go into the professional, it is all driven by a few core brands and SICA is a core brand on the adhesive side. SICAflex is standing as a synonym for bonding in many market segments. And so that's the leverage potential which then also enables us to take full advantage in all segments and channels. Now quickly on the strategy execution. I don't need to go deeply into. You have seen this. It is a reconfirmation from our side to our midterm targets, gaining and outgrow market share in a profitable way. That's, in short, the message as a takeaway. Also on the financial as well as on the non-financial, very clear and transparent journey towards 28 that we have always communicated. Now, in the background, you know, we have a strong position. As I said, we are undisputed market leader with 12% market share in 100 billion market potential industry. And it is highly fragmented, which means the winner can take it all if you act like. And that's what we do. We take market share out of the position of strength. And when you look into the different target markets, the eight target markets, you see a lot of differentiation, but there's the one common theme across all of them, and this value-add product focus. In all these target markets, when you talk to contractors, when you talk to owners, when you talk to specifiers, architects, you will hear this common theme. SICA is clearly leading through value, providing exceptional value to the construction, to the manufacturing industry. That's what we stand for. That's what we are leveraging. That's our innovation drive. We are also very well balanced when we look across the different markets, coming from the infrastructure side, the commercial construction, residential construction, and then also the manufacturing industry, the automotive and the industry segment, where we have a good share in the global business. Also, when we look at the new construction and refurbish, Mature markets are more leaning on the refurb side, emerging markets more on the new, but also emerging markets like China, for instance, are moving very clearly into becoming more and more also refurbishment or renovation market. These are all elements that we balance very well and where we have the competencies to also bring this to the local market situation and bring those competencies to the 102 countries that we have worldwide. The market penetration, the outgrow of the market, this picture you have seen before. I talked a lot about the leverage potential that the company has, that we are utilizing to cross-selling, cross-selling in simple terms, these projects. have multiple needs of solution from waterproofing, from bonding, from sealing. It is here the clear aspiration to make us the one-stop shop for our contractor, for the applicator, and leverage our great recognition in the market. The multi-channel approach, I mentioned it before, it goes from the direct business all the way to the e-commerce business where the brand is super relevant, where, let's say, the specific solution for specific customer is super relevant. We cover it all, and we benefit here also to leverage that across all these channels. Go where the money is in very simple terms. It is the call for action for the local organization. Don't come back and tell us what is not going so well. Look for the pockets of growth. Look for the activities that are still going strong and invest there. And here data centers as an absolutely clear outstanding element, which is happening everywhere as a go-to, but it is also infrastructure spend is much less influenced by market downturns, infrastructure spend is a way also to take advantage of the resilience of the infrastructure, spend time there. This is the call for action for our local organization. Don't explain, drive business where you have pockets of growth and utilize resources. the group-wide expertise to drive this. Key geographies, well, it's Europe, North America, China, always in focus, always, of course, key decisive markets for us to be very close to and demonstrate our leadership in these leading geographies. And innovation above everything. I repeat myself, innovation at the core for the reason being driving value, driving... market share gains and ultimately outperforming market situations, whatever they are. I like this slide very much. We put this together in a simple term to demonstrate, you know, innovation is not coming just by saying so. It requires strong commitment and investment. And we are constantly investing into our R&D, in our innovation. 16 global technology centers which then also are influencing the 100 plus local, very local R&D facilities, 1,800 chemists, more than 5% of our employees are working on the innovation path and spending substantial money on innovation, 280 million our annual R&D spend. This is the investment What then comes out is innovation, is patents, is unique approaches, which then are converted into solutions which generate value for our customers, are protected by IP, but are then recognized ultimately when we look at what our innovation power is delivering. It delivers three to five percentage point higher gross margin. It represents almost a quarter of the products with less than five years in the market. This is then also showing the power of innovation in our markets. An excellent example of this is an innovation that we brought just before COVID to the market. It's novel. It's a patent-protected waterproofing membrane, which can be used pre- and post-applied. to do basement waterproofing in a way that you have absolute peace of mind and no need to fear any water leakages. This is picking up pace with a 27% kegger. It is a highly specified solution. So it takes some time until it spreads, but it spreads very quickly, especially in the Middle East. And I have here the picture of the, Al Maktoum International Airport that is under construction in Dubai. This is a huge project. Almost 3 million square meters of waterproofing membranes are utilized. We are the sole supplier. We are here also adding another landmark construction building to the success story of the SeekerProof A plus membrane system. Also data centers. I can't talk enough about data centers. We love the owners because the owners love us. They love that Zika gives them peace of mind, that they get the highest reliable performing solutions so that they can execute inside the shell by not having to care about the shell itself or disruption from the roof, from the walls, from the floors. That's why we have been very early the preferred choice as we stand for this reputation and the roofing as a particularly important part has further advanced we will bring a self-healing membrane to the roof which means that the roof membrane can also absorb and correct impacts from nature. Hail, for instance, is here a painful, disruptive element, but also just UV sunlight in Arizona is quite different than here in in Switzerland. So these are elements that are super vital. On the other hand, the fibers on the concrete floor, these are taking out carbon emission quite heavily as we can replace steel. We also have lower maintenance costs. We have higher robustness of concrete floors with fibers, and it is very appealing to data center owners to advance here and also contribute to decarbonize their buildings. Coming back to M&A, bolt-on M&A, I think we have indicated at the last time also how accretive bolt-on M&As are, and as you can see here, we look at the presynergies, EBITDA multiple at the time when we kick off the integration, and then within the third year, of the integration, we achieve a four times lower EBITDA multiple. So an improvement that builds on our possibility to accelerate growth, top-line growth, cost synergies, cross-selling synergies, and ultimately then also drive the EBITDA growth of the acquired company. This is, in our view, a superior way to provide capital returns and we are lining up more to come in the near future. AKIM just one perfect example of one that soon is going into the implementation mode. The big one, NBCC, we like to talk about the big one as it has generated tremendous synergy across the organization. Last year, our second, let's say, full year after the closing, we generated $182 million. And when you look back, when we signed the deal, we had 160 to 180 for the full third year as synergy commitment. And we have raised it twice now. And as you can see, at the moment, we are already above the original third year synergy level. And we have increased the synergies by 25%. over the last two years, which is a testimonial for faster integration and also higher synergy gains on the cost side as well as on the revenue side. Now, business implementation, looking into some key elements, and I come back to the data center because it's not only, let's say, the roof and the floor. There are many more elements mission critical to data centers. As you can see, the flooring solution, the precast, many of them are precast solution where we are with the precast, where we are then also with the joint sealants that are very important to make sure that there is no interference. The concrete itself, the admixtures, the fibers, fire protection, super relevant in data centers. That's why also the roofing systems are preferring our PVC roofs over other technologies as best-in-class fire protection solutions. And as mentioned, we have a reference list of more than 4,000 completed data centers worldwide, and here a fast pace with 400 last year in execution, 230 alone in the Americas, and more to come. And you will hear more than also from my colleagues from the regions. This is a clear focal point for us to also outperform the markets in general. Not to forget infrastructure, infrastructure, mega cities are suffering of lack of infrastructures in emerging markets. As we can see here, we have here Brazil as a good example, but you find it in Santiago, you find it in Southeast Asia, everywhere there are infrastructure construction ongoing. The same happens also in mature markets here, the example from Munich. from the S-Bahn station in Munich, the deepest S-Bahn station in Germany, also in Auckland. This is ongoing, and these are high-profile jobs where, again, the reputation and the possibility of SICA to be, let's say, one source for many solutions, make us a premier supplier to those companies. big projects and is also, as I mentioned before, an area where there is constantly flowing money as the need for infrastructure upgrade or new infrastructure is endless and growing. Another important part are let's say the the infrastructure in regards to ports we see that the globalization as we have experienced is questioned and more and more ports are built for more regionalized or let's say for a new supply chain setup here a good example from vietnam vietnam is one of the Let's say countries that is benefiting from moving out of China into, let's say, a more neutral territory. So here a lot of construction ongoing. And when you look also what's going to happen in the near future in regards to the port infrastructure. Again, ports are very, very, let's say, high-end construction. Here we talk about exposure to seawater, exposure to heavy-duty traffic. This is, again, a field where SICA has a leading edge and is very involved in taking benefit of those momentums. One that we have talked a lot when we talked about the China expansion of the retail journey. It is still ongoing in China. We will hear that later on, but it has made its way into Southeast Asia. When you look at the chart here, where we were in 2003, we had roughly 80,000 points of sales in Southeast Asia. We had 90,000 points of sales in China when we took over Parex in 2019. China is now at 280,000 points of sales. But I want to talk about our journey in Southeast Asia, which is already now at somewhere around 170,000 points of sales, and we are rapidly expanding our points of sales across Southeast Asia. And as you can see, it comes with results. It comes with double-digit results. growth in that segment, and we expect here a good mid-teen growth also for the years ahead of us. And it is not only an Asian topic. You will hear it is also spilling over into other emerging markets in EMEA or in the Americas. But let's not have the regions give us a bit the flavor of their growth initiatives. And, Christoph, if you would like to kick it off with the largest region, EMEA.

So, thank you, Thomas, and good morning, everyone. So, I think giving a reliable outlook for EMEA for this year is a bit like crystal ball. all reading in these volatile times. Nevertheless, our main first and foremost target remains. We want to outperform our markets. We want to do better than our competitors. This is what we measure basically every quarter. And here I would say we don't have to hide ourselves, although of course we're used to different growth rates than the 2% that you have seen. So looking into this year, i would say for europe we will see but i don't think we will see a big big improvement markets most markets will remain challenging although there are some pretty good positive recovery signs mainly in eastern europe i must say so we had a very strong second half last year in eastern europe it's a lot of money from the european union flowing east, going into infrastructure mainly. And here I must say I believe that we will see a continuation of this also for the Nordics. We expect recovery. We see this already and here we are very well positioned with this recent acquisitions that we've done, this mortar companies in Sweden and in Denmark. I think here we have, we built here a pretty strong position also in comparison to our competitors and also France. I think France comes out of two to three years of really soft markets, kind of recession also. And we have been suffering there as well. And we see signs of recovering. We also believe that 26 will be a better market because there's quite a backlog of residential housing. People have to live. And there is not enough housing. houses and apartments there, so we will see this, the French market already improving here. Germany, I must say, we've been pretty positive actually. We heard about this 500 billion euros that the Germans want to invest into infrastructure. We haven't seen so much of this yet, so quite some delays, a lot of discussions, bureaucracy, etc. We will see when this comes. We're ready. We're there. This is our second largest market of the France in Europe. We will definitely see continued growth in Middle East and Africa. You've seen it from Thomas. These are double-digit growth markets, and it's, of course, it's a big pleasure to see how we're doing there. And I think Zika has a very strong position in these markets, in all of these countries. Wherever there is investment, we're there. We're having factories. We're having strong organizations. You've seen the McDoom Airport on Thomas' slide. I mean, this is probably our largest purchase order we have received so far from that region, and it's just the beginning. So overall, we remain humble. I think it's probably the best strategy these days, although we want to do better than all the EMEA markets for sure. But we believe in a gradual improvement over the year with definitely a stronger second half than the first half. Talking about growth initiatives, how we want to do that. And this is just a selection, but I would say it's some of the key focuses that we have. Sure, infrastructure, this continues. Also in Europe, I must say, there is money. Sometimes I'm wondering, I think European Union flows faster into Eastern Europe than it flows into Germany and France. Bureaucracy here is not really helping, but there are incredible projects going on. I was just in touch with our Romanian friends yesterday, a lot of road repairs, bridge repairs, and these are big businesses for us in SICA. There's investment into energy everywhere, not just in the Middle East, also in Europe, nuclear plants that are being built, and these are all mega projects for us. Airports you've seen, water projects, and I would like to mention here also defense. Cannot speak too loud about this, but there is the billions of euros going into defense, mainly in the east, also in the Nordics, their infrastructure project, roads, hangars for planes being built. And here SICA is very, very well positioned. So we're selling, for example, our epoxy flooring systems into these hangars that are being built for all these fighter jets that a lot of companies are... buying and then a bit a new topic for us residential linked to commercial there several really large real estate developments happening in the EMEA region one we have listed here on the picture it's called Elinikon this is a Greek investment actually it's a Greek investment company on the old premises of the Athens airport. This is an 8 billion euro investment and Sika has already started to deliver several million of euros and this will take a few years. It's like a bit like an espresso machine. Once you're in, they continue buying from you and we have a very strong position. We're clear number one in Greece and full range and we just Luckily enough, we're just investing in a new... in an expansion of our plant in Athens. So we will have a lot of capacity now to go after this one project. There are other residential developments like in Ras El Kema in Egypt at the Mediterranean. Actually, this is a $35 billion investment from a UAE company. And it's a city, same like this Elinikon, you know, with houses, with offices, marinas, roads. I mean, this is just paradise, of course, for us in SICK. And we have dedicated people that work only on these projects and try to penetrate these projects to the maximum. Data centers, you heard it already several times. So right now in Region EMEA alone, we are actively working on 106 projects. data center projects. Each of them gives us sales 2 to 3 million, some even a bit more. SICK is very well positioned here. These days everybody talks about data centers. I would say we were the first company in the US when this data center boom really started. Now it's coming over to Europe, even Africa. Interesting enough, they're building data centers in Morocco, for example, and here we have All these references, and of course this helps us to make sure we participate in these projects wherever they're being built. Pharma, also independent of the economies. There are 33 big pharma projects happening in EMEA right now, also in the Middle East, and these are always mega projects for us. And then, of course, food and beverage, also independent of economies and how they're doing, beer companies investing, my famous fish farms. Everybody's always making fun of me, but this is a lot of money here for us. A lot of fish farms being built all over Europe actually, and each project had several million of sales potential for us. And last but not least, retail distribution. Retail actually is doing has been doing well whether there is a crisis or no crisis people are investing into their homes to cheer them up themselves and here our strategy is to transform our professional products into let's say more consumer products and I added here one really fun picture from a pilot which we were doing actually a pop-up truck store we put the truck during one week in front of, I think, three or four do-it-yourself stores in France. Only one product. It's actually a cleaning product for your algs and moose on your terraces. You know, they get green always during winter. You buy this product and, you know, fantastic. By the way, we sell it also in Switzerland. So you can clean your terrace. One million euro sales in eight days. We couldn't believe it. And of course, now this has encouraged us to further scale this up and do this kind of pop-up truck stores also in other countries. So all in all, our job is to grow and not to be depressed or pessimistic or so. Markets are what they are. It's our job to be optimistic and to beat markets, to beat our competitors. We have it all. We have the range. We have very good people. And that's why I remain positive also for 2026. Handing over to Americas, I think.

Okay. Thank you, Christoph. Well, it's always great to follow Christoph. We get the excitement going and moving early in the room. So, good morning. It's now my pleasure to discuss the forecast for 2026 in region Americas. So, as you know, we saw a very challenging market environment. where markets were really constrained. And this was by economic, by regulatory, and trade policy uncertainty. And we say uncertainty. I believe I heard the word uncertainty more from our customers and partners in the last 12 months than I heard in the rest of my life combined. From right down the line, we had these difficulties. This uncertainty will certainly continue in the U.S., and I'd say to a lesser degree in Mexico in the first half of 2026, while Canada and the rest of Latin America will be slightly more positive to start the year. You know, we've seen excellent growth really throughout Latin America, with the exception of Mexico, and Canada was very strong in 2025 and really starting the year incredibly strong in 2020. in 2026 also led by some really nice infrastructure projects and continue to expand their market position in trade. We expect the U.S. market in Mexico to also improve in the second half of the year as our backlog of projects start to get released. Now, our markets in 25 and now again in 2026 are largely driven by our continued success in megaprojects. Now, when you say megaprojects, we classify these projects as those projects with a value exceeding $1 billion. So, while we saw quite a soft demand overall in our baseline business really throughout the region, These projects continue strongly and allow us to continue growth. So we've really, you know, Thomas mentioned go where the money is. So we saw very quickly our baseline business was not delivering as it should. Now we continue to gain market share. We didn't lose any customers. And we actually sold effectively there. But to really continue that growth platform, we needed new outlets. And these mega projects offered that opportunity. so in fact in the u.s mega projects increased by more than 45 from 2024 to 2025 and this project's velocity is actually increasing now and it's showing in our in our project backlogs for 2026. this is everything from on showing commercial industrial production and we see this a lot in in the u.s and in mexico it's a massive infrastructure project going on throughout the region And we saw this also in Latin America where previously, you know, there was not a lot of infrastructure development. When we see some geopolitical changes happening in many countries in Latin America, we start to see this shift where more and more money flows now into private construction but also into infrastructure development within these countries. And this really allows us to get into these big projects and continue a nice growth story. So you see here some really excellent projects we were able to deliver in 2025. And these projects will continue to deliver growth and use these segments in 2026. So here we see the data centers. And like the others, I can tell you I also really love data centers. I love everything about them. And they were really one of the things that the key drivers to sustain the business and I would say the overall construction industry. in the americas in 2025 i expect that to continue strongly in 2026. so we all know these data center investments uh and it was it will continue to be a key construction sector driver so across the americas we delivered the as you heard already 230 new data centers in 2025 so this uh this fantastic order velocity is actually increasing uh into 2026 uh so we started the year uh going full out in in our data center investment with uh new innovations and allow you know thomas showing a bit of the innovation that we do here uh it allows us to bring more value to each any project so while these are these are already mega projects Our dollar take per project continues to increase each year. And as we bring new innovative solutions, you know, it's all about speed. It's all about technology. And if there's a good solution, they're very open to these innovative solutions that then allow us to increase the sales and bring value to the project. So in the middle here, you see the Jacksonville Jaguar Stadium, which is currently undergoing this massive refurbishment. This will take this to really a world-class venue. There's a bit of a competition in many of these countries. We see it in the U.S., we see it in Mexico, that every stadium has to be a bit better than the last one, and always pushing for that customer experience. And now we see with our innovative solutions for every application from – from concrete, flooring, and roofing, to entry of joints and ceilings. In the past, we would have really celebrated winning a $1 million, $1 million US dollar type of stadium project. And we get very excited about that. Nowadays, with this full line of innovative solutions across the buying sector within these segments, and again, we have special teams dedicated to the specification of these projects, even some custom solutions for engineer joints. With these new innovations, we're allowed to take the same projects that we used to get a million dollars, and now we exceed $10 million plus. So the dollar take per stadium really takes off. And our vertical market approach unlocks these opportunities for growth. You know, we get in early, we specify, and then we work on the job site with the contractors. And there's always, you know, custom adaptions while you're on the site that allows us to, again, draw more revenue there. And this goes, you know, we always talk about the big ones, Jacksonville Jaguars, Buffalo Bills. the Raiders, the stadium Azteca in Mexico. So there's always been many in Brazil. But there's many big stadiums. But it's not just the pro stadiums we're looking at. It's the professional stadiums right down to the local sports arenas. And all of these need solutions. And when you really get into the same sector, you'd be surprised how many stadiums are around the world. Then we can talk about here at the bottom you see the infrastructure. You know, our infrastructure business really continues to bring growth everywhere across the Americas. Again, we see more and more shift as infrastructure development becomes a key priority, certainly in Latin America, but also now in the U.S. and in Canada. As money projects continue throughout 2026, you know, we see this nice development of the funding in many of these countries, so we expect a very robust infrastructure business in 2026 as well. Here in this picture, you see the TDM tunnel project in Santiago, Chile. This is three separate metro lines running under the city, where we have a full array of projects, products on these projects. We also have additional metro lines running. in Lima, Peru. We have one in Bogota, Colombia, and Sao Paulo, Brazil, and a huge project now in Toronto. So, you know, these big metros deliver huge sales, and they go on for years. So once you're in these big projects, you know, you have a long-term supply of... your portfolio into these projects, but also it continues to generate more and more business. Because when you're onsite with the contractors, there's always new opportunities for innovation. And then finally, our automotive team, we secured a record volume of new business awards. This ensures really a continued increase of our market penetration. and uh and innovation launches so to counter to to really capture the additional content for vehicle so you know what well the market is really sluggish the bill rates are sluggish in the market as long as we continue to capture more content per vehicle uh and and find the ways to enter these platforms we continue a nice um The soft vehicle production environment really overshadows a bit the robust opportunity pipeline as OEMs reset their proportion system strategies leading to a long-term growth effect. So while we'll continue to win new business and increase our market share across the region, even as the baseline business will be constrained by continuing uncertainty in the first half, We're really looking forward to a new vehicle in the market in the second half, and I am confident that our outstanding Americas team is ready for the challenge and already running full speed into year 2026. Okay, so that's it for the Americas. I'll turn it over to my friend Philip.

All right. Okay. Thanks, Mike. So back to, well, now to Asia Pacific. If you look at Asia Pacific, we see very two different trends. On the one hand side, we see China. China is still depressed. The construction industry is decreasing compared to previous years. This is mainly driven by weakened residential sector. We see here continued decrease in house prices. and consumer confidence suffering from that point of view. We don't see any short-term trend reversal. There has to be kind of people saving less and investing in residential again for us to see this trend reverse. On the positive side, we see some investments in infrastructure. We saw the launch of the 15th five-year plan by the Chinese government looking at, for example, urban renewal was one of the pillars that they want to invest in. This means that all the infrastructure that was built In the past years, it's up for refurbishment. It's investments in transportation and refurbishment of bridges and tunnels. It's also wastewater treatment and water infrastructure is specifically heightened there. So upside on the infrastructure side, but still looking at a depressed residential market. And this is counted by a very dynamic market in India and Southeast Asia. We had a very strong year in 2025 in those markets and see here continued opportunities for us to grow. One of the opportunities was already mentioned by Thomas, also by Christoph, is that there is the distribution retail markets. Here we had 170,000 point of sales that we were supplying the end of last year, 50,000 of which were opened alone last year. So this is a very accelerating area for us, using IT systems to track those point of sales, using IT systems be in touch with more than 7 million end users via WhatsApp or WeChat in China to see their buying patterns, to see how we can activate them buying products from us. So this is a continuing trend that we will push in this year, also in the coming years, also entering new markets such as Bangladesh or places like that to profit from the know-how that we've learned first in China and then in Southeast Asia. The other area of Growth opportunities for us is industrial construction. We see many companies de-risking their supply chains, building factories in Southeast Asia. It is manufacturing factories. This also then leads to poor infrastructure like Thomas showed in his slide. But also food and beverage data centers, of course, here the legwork done by our U.S. colleagues, where many of the Googles of this world, they open and build new data centers, and specifically in Malaysia, Thailand, where we were able to supply our products as well into those projects. Large transportation infrastructure, if you look at the megacities of the 20th largest cities in the world, 15 are in Asia Pacific. This means, you know, congestions. If you're driven through Mumbai or other places, you spend a lot of time stuck in traffic. So these cities are investing in bridges, in tunnels, in subway systems, in water infrastructure, wastewater treatment plants to cope with the growing demand. city around them. And this is happening in India, it's happening in Southeast Asia, in China, in many of those places. So we see a lot of airports, tunnels, subway systems being built in cities like that. The growing refurbishment trend I mentioned already in China is an area where we can profit from. as this infrastructure has been built 20 years ago and we see in the long term or in the medium term even the the share of new build versus refurbishment projects going towards the area of refurbishment where traditionally sika has more products to sell than in a new construction of a bridge then the other point i'd like to highlight is the automotive and industry part You had a focus on Asian OEMs, whether Chinese. We mentioned opening of the new factory or the domestication of some of the production in our Suzhou factory. but also Korean and Japanese OEMs. Here we also see the highest growth rates were in Southeast Asia and India. This is then local OEMs like VinFast, for example, in Vietnam, but also Chinese and Japanese producers opening their factories in those markets and us being able to have the experience with them in their home markets, being one in the pole position to supply the products also in these new factories that these companies are building in those markets. So with that, positive outlook for Asia Pacific with the asterisks that the big question marks still have how the residential market in China will evaluate. But we have quite some confidence that at some point this trend will revert. Don't ask me for a specific date because I won't be able to give you that at this point in time. But nevertheless, I'm handing now back to Thomas or Adrian, sorry.

I'll go first. Well, thanks to my colleagues here and also a warm welcome to everybody here in the room and the ones following online. I will now dive a bit deeper into the financial result and I would say We have delivered quite a respectable set of numbers against near-term cyclical headwinds, as we have seen. The results demonstrate here a consistently high cash generation and also how SICA has well progressed in executing its efficiency program as part of Fast Forward. Here are, again, some of the highlights, 11.2 billion in sales, 0.6% growth in local currency, a decline in Swiss francs, minus 4.8% on quite adverse foreign exchange effects. A further strong expansion of the material margin to 54.9%, up 50 base points. An EBITDA of 2,065,000,000 or 18.4% on a reported basis impacted by fast-forward one-time cost and some operational deleverage caused by revenue weakness, particularly in the second half and particularly in China. Excluding fast-forward cost, of 86 million EBITDA was 2.15 billion and the margin 19.2% only, slightly below the previous year at 19.3. Reported EBIT 1.49 billion, 13.3% of net sales also here, impact of fast forward, including here some impairment charges and 108 million included, as well as net profit 1 billion and 45 million, 9.3% of net sales also here impacted by fast forward. Very positively, a continued strong cash generation with an operating free cash flow of 1.36 billion or 12.1%. Actually, a slight increase here in the strong net sales ratio that we already had in 2024. Fast-forward cost measures, well on track with related one-time costs all recognized in 2025. Our fast-forward program delivers a strong return on investment with cash payback costs of less than two years and is expected to already generate 80 million of benefits in 2025. And then lastly, here on the dividend side, the Board of Directors again proposes an attractive dividend with an increase of 2.8% to 3 Swiss francs 70 per share. Let me now talk about some of the individual elements in a bit more detail, starting again on the top line, local currency growth of 0.6%. breaks down into one percentage point of acquisition growth, while organic growth was slightly negative on group level, minus 0.4% for the year related to soft markets mentioned, particularly China, particularly Q4. Acquisition growth was mostly related to the six transactions we completed in 25 and contributed this 1%. Foreign exchange impacts, as mentioned, significantly negative, minus 5.4% or a translation of more than 600 million to a reported year growth of minus 4.8% in Swiss francs. Quickly on the regions, Thomas talked about it. If we look at sales growth in region in EMEA and Americas, quite solid 2.2% sales growth across both region also with organic growth in both regions. While the US saw a negative trend in the second half of 2025, which was also partially attributable to a lengthy government shutdown. Negative growth in Asia-Pacific was driven by a significant decline in the China construction business without Here, China construction growth rate would have been at quite a similar level of the two other regions. And also, notably here, foreign exchange impact, the most negative in the Americas, driven obviously by the weak U.S. dollar. Now, the development in China and the construction business, which actually declined by 18%, also had an impact on overall group. If you exclude here China again on group level, we would have actually grown organically 1.2% versus the 0.4% on group level reported. Now, turning to the P&L and moving down here from the sales line in full year 25, as mentioned, we have delivered an expansion of the material margin with gross result expanding by 40 base points to 54.9%. Overall positive cost price spread was driven by our focus on delivering innovative value add solutions and also modestly falling input cost here helped by our structural procurement initiatives. The deflationary environment in China was compensated by a positive price contribution elsewhere. The dilution effect of M&A was actually minute, less than 10 base points. Reported operating costs, this includes personnel costs as well as other operating expenses, fell by 1.4%. Within these costs, SICA recognized 68 million of fast-forward one-time costs. Normalizing for this operating cost decrease was minus 3%. Continued solid NBCC-related synergies as well as efficiency measures were offset by underlying cost inflation and some operating deleverage, particularly in Q4. On the personnel cost specifically, which increased by 1.7%, here the impact of fast-forward related severance cost was 57 million. Without those one-time costs, personnel costs would have decreased by 1%. Synergies as well as operational efficiency measures were not quite sufficient to negate underlying wage inflation of close to 3.5% across the group. Q4 in particular saw higher health benefit and pension cost as well as negative accrual phasing impact versus previous year. Underlying organic net personnel cost increase was 1.7% on local currency basis. Other operating expenses decreased strongly by 4.6%, excluding fast-forward one-time cost of $11 million. Cost decline was actually faster than the rate of revenue decline at minus 5.2%. Operational efficiency initiatives and delivery were the driver, while Q4 comparison was negatively affected by an insurance payment and also some R&D credits in previous year Q4. As a result, reported EBITDA decreased by 9% to 2,065,000,000, or the mentioned 18.4%. Again, normalizing for fast forward, 19.2%. In looking here at the EBITDA bridge in 25, starting on the left-hand side with 2024, 19.3 ratio, we delivered an organic material margin improvement of 50 base points, driven by new product innovation as well as structural cost efficiencies, M&A synergies coming from MBCC contributed 40 base points. We saw the overall comparison number in terms of synergies compared to prior acquisition. The incremental contribution in 25 was 57 million and in total, as Thomas mentioned, already exceeded original guidance of overall synergies. On the other hand, foreign exchange, including some hyperinflation effects, as well as the impact from a negative fixed cost leverage reduced margins by 20%. and 70 base points respectively. And the aforementioned fast forward cost had a negative impact of 70 base points to arrive at the reported EBITDA figure. Now, if we look at the bridge here and exclude China, overall, the underlying EBITDA margin would have increased to 19.7%, so a clear improvement material margin by 70 base points. while the negative leverage reduces here to minus 40 from minus 70. But it is, however, important also to highlight that the China construction business remains a profitable business with clearly double-digit EBITDA percentage numbers. Turning back to the P&L, looking at depreciation and amortization expense, which grew by 2.9% or 60 million. Also here we have a fast forward impact of roughly 22 million and slightly higher intangible amortization relating to bolt-on acquisitions, but organically depreciation and amortization expense grew largely in line with sales. This is also the expectation going forward for 2026. As a result, EBIT was impacted here over proportionally with a decrease of minus 12.9%. Excluding fast forward, it was 1.601 billion. If we look below EBIT, net interest and financial expense, this decreased by 30 million compared to the same period last year. The decrease is largely related to lower debt and also the scheduled replacement of a Euro bond with fifth bond financing. Also here expectation going forward for interest costs to continue to slightly drop. A word to the group tax rate here, an increase to 22.9%. Previous year had a favorable one-time effect on the deferred tax position relating to legal restructuring. Going forward, we also expect about a 23% tax rate overall. Quickly turning to the balance sheet, which reduced in size in 25. This was driven mainly by two factors. Firstly, the continued appreciation of the Swiss franc particularly versus the U.S. dollar, with approximately $900 million of translation impact. Secondly, and in spite of a higher cash position here, lower current assets, particularly related to disciplined working capital management, balance sheet total fell by 5.2%. The decrease in intangible assets is strongly attributable to foreign exchange as well and shifts within the liabilities is largely related to financing and de-financing activities where we repaid you know, a bond tranche and refinanced twice during 25 with multiple tranches in the market. Shareholder equity reduced by 5.4%. Also here translation driven, whereas the equity ratio remained at 44%. Rossi impacted here by fast forward cost as well, as well as currency related EBIT impact decreased to 12.3%. Now turning to cash flow, quite a strong development as mentioned, 1.36 billion. We have a strong second-half performance given our focus here, particularly on working capital management, 100% conversion of here profit before tax into cash flow. main contributors mentioned networking capital management and providing roughly 70 million of cash versus here a consumption of 160 million last year modestly higher you know capex and slightly higher cash taxes accounted for the difference and in looking at the ratio again a small increase on already a sizable level to 12.1%. On the leverage here, while here net debt reduced by 300 million, 2025 net debt EBITDA leverage increased slightly. If you exclude fast forward at the same ratio of last year, We have a strong investment rating and expect another strong free cash flow performance in 2026. This strong cash generation also affords us with some optionality as part of our capital allocation policy, which is focused on high long-term value creation for our shareholders. First priority is supporting organic growth and drive profitability. through high return investment, but also highly value accretive bolt-on acquisitions where we can demonstrate superior returns through cost synergies and revenue and cash acceleration. We have here a very well-proven playbook to deliver synergies. We will continue to reward our shareholders with a progressive dividend policy as you have seen, which allows for efficient capital management and steady increasing returns to shareholders. and we will consider share buybacks opportunistically where we have access cash flow available after other uses which also includes further deleveraging. The focus is simple, create here the most value possible from these cash flows and therefore we will always weigh here which route can deliver the greatest return to our shareholders. Briefly again on the dividend here as proposed, a dividend increase of 10 ROP and here proposed by our board of directors, an increase of 2.8%. 50% of the proposed payout will come out of retained earnings, 50% out of capital contribution reserves. Then lastly, before we turn to the broader outlook for 26, a brief recap here of Fast Forward. which is a very strong return on investment and payback of less than two years and is well on the way. It will drive a leaner cost structure with benefits of 80 to 110 million by 2028 coming from this activity for which one time cost of 108 million. including 86 million within EBITDA, have all been recognized in 2025. And the investment part in accelerated rollout of digital platforms, technology, AI, and particularly also leveraging our global data pool will accelerate innovation growth and enhance customer value. Investments will amount to 120 to 150 million over the next three years and drive benefits of 70 to 90 million in combination. This is 150 to 200 million annual benefits by 2028, where of about 80 million are expected to materialize in 2026 already. With this, we'll come to the outlook for 26, handing back to Thomas. Thank you.

Good. Thank you, Adrian. And brief. One slide outlook for 26. Talked a lot about all the efforts we have put in place. We are confident that we can deliver on the outperformance of the markets to 3% to 6%. We have gauged this with the market condition. Call them muted still in the first half of the year for sure. That leads local currency growth of 1% to 4%. At the same time, increasing our EBITDA margin into the range of 19.5% to 20%. This is our commitment, our confidence for 2026. At the same time, we reconfirm our strategic target of the strategy 28 for sustainable, profitable growth for the company. And with that, we would now opening the Q&A and I hand over to Dominic so that also our virtual participants have a chance to be lined up for questions. Thank you, Thomas.

And probably questions, are there any questions? Alessandro Folletti, probably if you want to start here, right in front.

Thank you for taking my question. I would like to dive a little bit deeper if you want in the market outlook for this year. um your one to four percent guidance implies a decline of the market you mentioned that was your press release so would it be possible to go a little bit more in detail along the lines of what you have shown on your slide 23 where you showed 20 of the business is residential 30 infrastructure 35 commercial 15 automotive maybe what do you see in those four segments by geography is possible

But I think it's a good segue by looking at the four segments. And if I start on the residential side, residential is globally challenged, but the biggest impact still will be seen in the rebasing of our residential business in China. So you have heard it also from Christoph, and also to some part from Mike, the residential business is, let's say, in other parts outside of China, also, let's say, not booming, but it is kind of also leveling, eventually even showing signs to come back. Like in France, when we look at the permit level, it seems that there is some movement, but nothing exciting. So the residential out of the four segments, certainly the one especially also impacted by China being the most challenged. When you go over to the infrastructure, I think here there is a good momentum. This is high in demand. They are big projects. There's a lot of renovation. Money is still flowing. Now, independent of the German complexity and release of money, I think here it's a fair bet that this segment will provide local currency growth above the others. probably even organic positive growth as there are a lot of activities in this segment. Similar to the automotive and industry sector, the industry is not really booming. I think we have to expect that those of the China production build rates will reduce. Heavy incentives have been running out on the e-mobility sector. But when you look at the total markets, we expect probably slight declines in Europe and in North America when it comes to build rates. But the very strong new book sales and the incremental activity, as I mentioned, also in China makes us confident that this segment will also, similar to infrastructure, contribute. On the commercial section here, I mean, we have the big outlier, that's the data center, that's a key contributor that is offsetting many other segments of the commercial construction, but not all of them. There, it's probably to say this is somewhere in between the residential and the other two segments, In these regards, we see still some hesitation to put down big investments, still driven by uncertainties on where to place factory. The money, the projects, as I always mentioned, you know, is actually available. The projects are ready. But I think we still haven't yet enough clarity on how the new supply chain setup will look like, given the changes that occur currently. So this is probably the area where we have some mixed impact.

Just one follow-up, then I pass on the mic. On China, you mentioned, I think, in the slide that the market was down 45%. And then I think, Adrian, you said you were down 18%. Is that correct?

Yeah, 45% is just within two years, you know. We talk here about the new build, the new consumed, you know, not the empty apartment we talk about. the apartment space that has been occupied by new owners that has reduced by 45% with an acceleration in the second, in 25. So in 25 on itself, it's roughly 20, 25% decline.

Of the relevant residential market in China. Yeah. Only residential.

Yes.

And you were down 18. Yes. And of this 18, How much is self-induced by reducing prices and reducing point of sales, et cetera?

We based our business focusing on margin protection, on quality, and that is part of the 18% decline.

Thank you. And the next question goes just to the neighbor here, Yannick from Takabe.

Thank you for taking the question. The first question is about data centers. You mentioned it a couple of times in your slides. I mean, how large is your exposure right now there? How much of total revenue? What do you think how large you can get? So that is the first question. And the second question is more towards capital allocation. I mean, under which circumstances would you consider a share buyback? I mean, if you look today at your share price, do you think you will generate higher returns with those Bolton acquisitions than doing a share buyback?

Okay, I take the first question. As data center contribution to the group is quite significant. It has increased from a low single digit to a mid single digit contribution. In the Americas is even reaching almost a double digit contribution. It is a momentum that we want to take advantage of, as we see that this Womin data center will probably last another couple of years. and will probably then also be followed by a boom for energy infrastructure, which is foreseeable as a follow-up to this massive capacity that is built globally that the consumed energy needs to be kind of available and deployed close to those data centers.

guess on here the capital allocation and the share buyback specifically I mean I sort of laid out here the elements and also the priority and if you do look and we look at this really from a return perspective on the bolt-ons we can clearly demonstrate here that strong returns actually superior here even at this level, but this is a constant revaluation we do because at the end of the day, it is driven by sort of the most effective use of capital.

There is a question from Remo Rosenau, a British bank.

Thank you. on your guidance of 1% to 4% growth in local currencies, which includes acquisitions. The acquisition contribution will most likely be higher this year than last year. You made two quite relatively large deals in January, and one is not closed yet, but still, it's almost 300 million. You have spillovers from last year's seven acquisitions, so the acquisition effect could well be around 3% in 26. So these 1 to 4 then translate into an organic growth of minus 2 to plus 1, which seems not very high.

Maybe here quickly on the sort of the M&A contribution here. And you mentioned the transactions. I mean, the one in Turkey is unlikely to close before the third quarter. So I would say sort of currently in that sense in the bag, if you here assume closing at that point is roughly one and a half percent. There is not that much spillover. But of course, that is the element that we have, you know, currently here ongoing.

Okay, so in your calculations, you have one and a half. Okay, fair enough. Then the impairments, I think 21.8 million was in the fourth quarter due to fast forward. In the full year, it was almost 30 million, however. It's not a big number, but what is the difference then?

It's just not related to the program. That is the only difference. It's smaller machinery impairments in other places.

Okay. And then on this peer comparison you did in order to demonstrate that you are doing better than your peers, Do you have a list which peers you have taken there? Because it was not in the presentation.

We do have the list. This is the list that is in the annual report. These are the Obermatt peers. And out of those roughly 25, we selected the ones that are closest to our business. So it's roughly 10 out of them are in our peer comparison. It is also important that we have, let's say, reported figures that are related to our business. So this is a selection of 10. Okay. And the bigger group is available in the annual report. This is part of the total list.

Okay. Good. Thank you.

Thank you very much. Next question goes back here on this side again to Patrick Lafayette from UBS.

Thank you. Two or three questions. The first one would be on the guidance, right? You already described that H1 will be challenging, then hopefully a more dynamic H2. Just wondering, how would you define then the organic outlook for H1 and Q1? I'm trying to understand how much catch-up you need in the second half to get to the range.

It's a fair point. I mean, we expect that given also the elements from the prior year where we had a strong start in the Americas or especially in the US, where we had also, let's say, the rebasing in China not yet taken place. So our assumption is that we are going to see organic negative growth in the first half, more pronounced probably in Q1 than in Q2. But that's then going to turn into positive in Q3 and Q4, given also the comp base will be different, quite different in the second half.

Thank you, that's very helpful. And then also the guidance and targets, I think a sensible move to abandon the 20% that was originally formulated, putting it into a range. But still, if we maintain the mid-term plan with the 20 to 23, Is this just pushed out by one year? Because I remember in November we discussed that the fast-forward program was being implemented in order to safeguard the 20%, right, in the absence of operating leverage. But probably negative leverage was worse. China on top, right, the deteriorator. But, yeah, can you update us on the timeline for the 20%?

I think you got it. You know what I mean? In Q4, with the events in Q4, we had a more pronounced negative leverage than anticipated, which we also have to consider since the market has fundamentally not turned over New Year so that we are here also. safely advised to consider still, let's say, some negative operating leverage. Even so, we have, I think, means in the pocket that are able to offset some of that, but not all of that. That's why we also look at the range from 19.5 to 20 as being the range that is in incorporating still some negative leverage, which would, if you go to the upper side of the guidance, of course, reduce and bring us close to the 20%. And looking further out, I think this momentum of generating efficiency and generate synergies across the organization, structural savings will continue. And we also expect that this negative leverage that we still anticipate for 26 will also reduce or even turn into a positive in the years to come. The likelihood, you know, our commitment to the range in the midterm is strong.

So, but the way I read this is that you remain committed to 28, but you wouldn't say today already that 27 will be a 20.

For sure. It is too early. I can't say what the markets are going to do. I think we have learned the lessons, you know, lately announcements about what happens in the Middle East. You know, this is just another year where a lot of confusion comes around. And I can't say how 27 will turn out. The indications I get from my visit to China is that probably 27 could be a turning point in the residential market in China, could. I think also when I look at all the activities that are lined up, there could be a tremendous uptick. We see this as a cycle, a short-term cycle, but how long this cycle lasts is really something we don't know. We have to be cautious in making here predictions and statements. Our outperformance of the market, that's to me the substantial element that we need to focus on and then be a bit more hesitant in making here guidance for the global economical evolution.

Thanks. And a very quick one on the one-offs. Maybe I missed it in the annual report, but did you provide a distribution across the regions or the segments of the 86 million?

We didn't provide the details here in the annual report. In terms of the one-off, it's roughly 30 million each in EMEA and the Americas 15 to 20 in Asia Pacific and on corporate level between 5 and 10.

Okay, thank you very much. Thank you, Patrick. And then let's move to the vertical attendancy. We have here Ben Radamartin from Goldman Sachs, who will basically start with the first question.

Hi, good morning. Thanks very much for the questions this morning, Thomas and Adrian and Dominic. My first was just on APAC margins. You know, the margin of the region dropped from 21% 2024 to 18% 2025. I guess post the program changes, is it right to think that there's a path for the region to return back to 20% EBITDA margins? And my second would just be on working capital. Great to see some success there in improvements in 2025 back down to 18% of sales. Is there scope for further improvements there or is that the right level of efficiency when we think about working capital? Thank you.

Yeah, happy to take the two questions here. Yes, on the margin, there is a path. Obviously, we talked about the impact on China. Also, fast forward, well, progressing, also refocusing here on the business and obviously China. is having an impact here but also making progress in other markets. That's the clear ambition on Asia-Pacific margins. On working capital, yes, I do believe there is More scope also here, you know, structurally in terms of efficiency on, let's say, the warehousing, the supply chain side, the continued focus here on receivable, you know, collection and management, but also structurally working on the payables, I would say, sort of, you know, a stepwise further improvement is clearly targeted.

Great. Thank you.

Perfect. And the next one, the next question goes to Arnold Lehmann from Bank of America.

Hello, I hope you can hear me. It's Arnaud here. I have three questions, if I may. Firstly, on China, it peaked at 11% of sales. I think it's going to be about 9% of sales now. Do you have a level after restructuring, how it could look like in terms of contribution? Is it going to be... 5-6% of sales once you conclude your restructuring and considering the ongoing pressure in the market. That's my first question. My second question is on the price-cost outlook. We're seeing some raw materials related to oil and NAFTA recovering this year. Are you planning some price increases to offset that? And lastly, you highlighted adhesives as a particular area of interest. Obviously, you've announced the AKIM acquisition. Do you plan to do more acquisitions in the adhesive space? Thank you very much.

Okay. Thank you, Arno. I take the first and the third question. And talking about China, of course, naturally, With the action taken, our roughly 10%, 11% contribution from China short-term will be reduced to 9%, 8%. Please also consider that in China we have the growing automotive industry business helping to offset. So I don't anticipate a decline potentially. further down, but it will be a high single-digit contribution. And once also then the residential market is returning to growth, probably still be somewhere at the same level as before. So here, the China contribution is for us very relevant. Our China business in China is healthy, is profitable, and it is also the base for us to expand with the Chinese players outside of China. And here not only the automotive manufacturers that are building factories around the globe, but also the Chinese main contractors that go abroad and that become main contractors on large projects in Southeast Asia, Middle East, Africa. And just as an implication, this Abu Dhabi airport is in the hands of a Chinese main contractor. And you need access to the main contractor. And if you are not with them in China, you are at the strategic disadvantage as you don't have the relation to the decision makers. Of course, you need a local presence in in the UAE to capture on those. But so the China, let's say, aspect is for us of long-term strategic relevance to have a good representation and, of course, also grow with the Chinese player as they take more share of the global economy going forward, similar to what we have seen In the 90s, 80s, the Japanese, the Koreans, this is just following the nature of the most competitive players in the market. And then your last question. Sealing and bonding acquisition. Sealing and bonding acquisition, yes. I mean, this, of course, we like the adhesive segment and we highlighted it. But it is one aspect of many that we consider. And as I outlined, our selection process for the prospects and then ultimately advancing has many more aspects in there. And if we have a choice, then we certainly provide preferences. But in these regards, This has been a fantastic prospect that is now coming to realization. No, it is not the signal that the next five transactions will be in adhesives and sealants. We look where we do have the best return, where we have the best opportunities. to make those bolt-ons accretive and value-enhancing. And therefore, we don't exclude any of our technologies nor any of the target markets.

Maybe then on the question as to price-cost spread, I mean, on the input cost aspect, And here, I mean, you mentioned oil price, but of course, it's also quite volatile. Typically, our base case is rather flat-dish development, but particularly also given geopolitical events, you know, can have an impact here also in regards to, let's say, capacity and utilization. But, you know, broadly speaking, at least for the next few months, that would be our expectation. As to pricing, we will continue to value sell. We will, of course, also continue here to manage input cost increases. In China, we have seen quite a deflationary environment in in 25 it's probably going to stay a bit longer not the same magnitude but expecting here some price impact in in other parts of of the world and so slightly a positive all in all for for 26. thank you very much very clear

okay two more questions uh from from work from vertical attendance uh this is pusharini gosh first one from bernstein and then we come back and have a final round of questions here for the room hi uh thank you for taking my questions so i have a few

So could you provide an update on your fast-forward program? How has it been progressing in the first few months? So basically in terms of the headcount reduction, the capacity optimization in China, and then also how are you progressing on the digital investments, you know, and the benefits that we were expecting for 2026? So my second question is on the margin guidance and could you potentially talk through the puts and takes for going from the 18.4% margin in 2025 to the guidance of 19.5% to 20% in 2026. And my last question is on the material margin. So you've always, you know, maintained it in a very close range of 54% to 55%, but it has been steadily increasing. So how should we think about, you know, the progress in future? Thank you.

Okay, thank you. answer the first question, the fast forward question. Of course, this is a program that is not over in a couple of weeks. It has many elements to it. We are in the middle of the cost implementation, cost saving implementation, especially with a strong focus on China. also in consolidating the footprint in China. This is all considered into our 25, let's say, cost accrual, the execution, also the closing and the transfer. of capacity is something that needs to be well managed and is taking place now in the first few months of the year. So this is progressing. Front-loaded activities, and here again in China has been the fundamental, let's say, change in the approach to the market. We have implemented a more agile, a more granular sales approach. We have reduced from seven layers to four layers in making sure that we capture The opportunities in the various provinces, cities with smaller sales team that are also with smart incentives guided away from the former, let's say, top line opportunities. growth incentives that have been very successful during many years. So here these things have been implemented. These things are active as we speak, but the most structural elements by the nature of it takes more time. Also outside of China, The elements where also headcount reduction have been included require time to transfer responsibility, but also to respect the legal requirements in regards to union contracts and notice period. So this is still ongoing in the first month of the year, but will then cease and be completed in Q2 of 26.

Good. And specifically on your sort of margin or margin bridge question, yes, clearly in 25, I mean, fast forward, the one time cost 86 million in EBITDA did have here an impact. So the starting point will be rather at 19.2. It will also mean that we have here a structurally lower cost base. So we're expecting about 60, 70 base points of contribution in 26 from fast forward, we'll have a smaller incremental element still coming from NBCC acquisition, the synergies 20 to 30 base points. The new bolt-on should be sort of rather insignificant in terms of the dilution in terms of material margin and this is a bit connected to your last question here as I was referring to the underlying input cost development and here slightly incremental pricing impact also here you know, a slight potential to increase, although we're sitting here, as you commented, at the upper end of sort of the broad guidance range, but this is not obviously, you know, cost in stone. And then last, we have the leverage piece, and here this is clearly related to the top line. Fixed cost leverage, if we're at the lower end of the sales guidance, 1%, this will most likely mean sort of a similar type of negative leverage as in 25, as opposed to the upper range where clearly this would be lower and be commensurate with closer to 20% overall EBITDA.

Thank you.

Okay, thank you very much. So let's come back. I see there is one last question that we have from virtual. This is Victor Sean from Baader Bank. Please come up with your question then.

Hello everyone. I hope you hear me. Thanks for taking my question. It is clear that the U.S. shut down the CECA growth potential for 2025, notably in the fourth quarter. However, according to what I understood, most of the projects have been postponed and cancelled. Thereby, I was wondering if you have further information on this? I mean, this is clear that if the projects have been postponed, there is a big chance for them to materialize in the future. So I wanted to know if you have any further visibility on those, please. Thank you.

Okay, I think that's it. Fair question, and to be clear, I mean, the government shutdown hasn't put those projects at risk or changed the mind of the owners. It has delayed the implementation of the projects, and therefore... Fundamentally, these projects are going into execution just with a certain delay, because also after the shutdown, until this backlog is then re-established, it takes a bit of time. But it's not that these activities due to the shutdown would have been, let's say, now cancelled.

so excellent thank you very much so before i give it back to thomas let's do a last round here in the audience and the question goes out here in on this hand side please first one

Thank you very much. I'm Cece Griffiths from Federated Hermes. I have two questions. You talked a lot about digital transformation and innovation, but there wasn't a lot of talk about how you're using AI or leveraging or seeing increased opportunities for using artificial intelligence. So could you expand on that and talk about how you see that affecting your position in innovation and digital transformation? The second question relates to the confirmed targets for sustainability, and it was great to see the performance on your Scope 1 and 2 emissions as well as your water disposal. We've seen quite a few companies in this sector cite a lot of challenges, including high energy prices, unfavorable public policy. We've also seen just general reduction in investment. So it'd be good for you to expand on if these factors have weighed in in your reconfirmation of your sustainability targets, especially in particular to your climate targets as well. Thank you.

Good. I think we are going to communicate over the course of the year much more on our digital transformation as this is the investment part of the fast forward that makes us most excited at this structurally changing, let's say, our competitive ability in the market. Most pronounced and most advanced is our ability to work on the innovation side. We have our 16 global technology centers which in the past used to make their experiments stand alone and shared outcome, shared fantastic innovation in forms of product formulations. With AI-enhanced tool, we have now the possibility to actually select every single data point of an experiment and put it into the data lake so that every, let's say... effect on experiment level can be utilized for then other experiments and shortening the development cycle at the same time also catching effects which may on the original purpose of an experiment not have been a target, but could be a target in another prospect. So this availability that everything that in this 1800 chemists go on when they every day make tests and verify, they have a clear target on what they want to achieve. But this system, this centralized system is now collecting all the data that are constantly generated, and then they can be, let's say, utilized for different purposes for saying, okay, I need this effect, I have a substrate, I need to bond to this substrate, and where shall I start? And this can then trigger into this massive information that is available to say, here have been experiments, and you can dial in, and you can a shortcut massively development time and enhance also the scientists with, let's say, initial staff basis where they otherwise would start at scratch and try to compare through the traditional way in looking into products and innovation that have been established. This is very tangible. This is ramping up. We have here a very strong, let's say, innovation culture in the traditional R&D enhanced with data scientists that are kind of pairing themselves with the, let's say, The nature scientists, and this is having great traction. We will come back on that as this is constantly evolving. But this is one of the three major transformative elements. The others are on supply chain excellence, ease of doing business, being able to bring the customer the value they instantly where needed and shortcutting traditional ways of having inventory through several steps rather than bringing it to where it is consumed, which is the construction site at a given time, at a given slot and allowing so also that efficiency for our customers is increasing, network and capital is decreasing. These are things on the supply chain, on the Automation of our process inside and towards the customer and ultimately the sales excellence. So the interaction with our customer also having much more. Let's say outside in inside out information to also bring more leads and possibilities to our customer by having all this. Let's say access into the market data and also show the relevance where they probably have the best possibility together with us to win business for them. So it is an incremental sales aspect instead of waiting for the customer to come to us actually also utilizing our capabilities to bring business to the customer. And these are elements that we are working on. This is in the making. It requires a strong foundation, a strong harmonized database, which we also have part of our investments going into establishing the lake, which then becomes then for for the machines and for the tools that we want to utilize the base. But it is fantastic. We have a market leading position across the globe, across the technology, across all the segments. You know, we have the strongest insight data lake. at hand and we want to utilize that and then empower that with external information which makes it unique towards the market the value we can provide to our stakeholders not only contractors but also architects specifiers as they are living in a ever growing complexity world and this is de-complexizing the world for them

Thank you. And then just a bit on the challenges around just sustainability targets.

Here, I think, is a fundamental difference between us as we are not energy heavy. We are not, let's say, upstream. We are not on the heavy side. Our own energy consumption, as you have seen, we can steer it quite nicely. Our scope three challenge is a challenge that we actively address with our suppliers as this is the input there. We have it in our hands also to extend the life of our products and therefore also improve the scope three, which is also of course the value for the customer, the longer it lasts, the better, the less renovation, the less running cost, a very strong aspect in the ROI evaluation of our customer. And therefore for us, Whatever you see eventually happening at other companies that are scaling back, for us actually, it's full steam in because it is a creative, it's performance enhancing, and it is also very relevant for our customers.

Okay. Last question. I'll be conscious of our time. It goes to Martin Flückiger from Capri Server.

Yeah, morning gentlemen, thanks for taking my question. I've got three, actually. First one is on data centers. You've been, Thomas has been raving about data center growth, and I was just wondering whether you could put your money where your mouth is and basically reveal what kind of growth you've seen in data centers in the U.S. in 2025 organically and what kind of outlook you're foreseeing in this market for 2026. That's my first question. Then my second question is on, I guess that's for Adrian, is on the margin bridge again. Just wondering at current spot rates, what kind of headwind from FX do you expect for 2026? Now, you know, I'm not asking you to predict currency movements just on current spot rates. What you are seeing there and what kind of non-material cost inflation you think is a reasonable assumption for this year. And then my final question is on your statement with regards to expected market decline in 2026. Just curious about how you define that market. Are you talking about global construction output growth or decline? Are you talking about construction chemicals? And, you know, if it is the latter, are you talking about the global market as such or do you sales weight it according to your own exposures? Thank you very much.

Okay, I take the data center question. As you say, I'm excited. It is a strong contributor on the commercial segment, not only in the US, but across the board. It has a strong double-digit increase over the years, consistently, and we expect also in 26 that this will double-digit grow on that side. That's in particular on the roofing side, on the flooring side, waterproofing side, ceiling side, all these aspects play here. So this is... one of the let's say growth engines of our us business it's very significant therefore it's also creeping up in relevance of the total share of our us business then on your crystal ball question here in terms of exchange rates of course and you said it it's difficult to predict but let's say at current

Prevailing rates, we're basically looking at sort of around 3 to 4% negative foreign exchange impact as a best guess. But, of course, this is quite volatile. In terms of overall inflation, the overall expectation would be to – come down to, let's say, below the 3%. Obviously, on the wage side, we had a bit more than 3% still in 2025, but here I would assume there is going to be rather a bit of a reduction, so probably around 2.5% in terms of overall inflation. On, let's say, your market question, and these here, obviously, we are operating in many different markets in many different segments. It is what we would consider sort of our addressable market, not specifically sales-weighted, although there is a China element in, and it's really in looking at sort of the most relevant market. which may also vary sort of across here the business. So it's an estimation overall which we're seeing here and which this number is based on.

Okay, thanks. But just to clarify, my question regarding FX and non-material cost of inflation headwinds were not related to impact on sales growth. I was just wondering, based on the chart that you've shown in your presentation for the EBITDA bridge, you know, whether you could put those bips down to those two drivers roughly.

And here I was showing it's roughly sort of a 20 base points of additional impact. It was more on the OPEC side, actually not so much on the raw material. with the expectation of FX to be not quite as severe. I would also see here that this is rather smaller, if any. I mean, we have overall quite a strong here natural hedge in terms of cost base being where we sell. So from an effect on top of translation, I would rather see this as a minor impact for 26.

okay thank you very much for all of our of all of your questions and with this i'm heading back to thomas for a final remark good thank you very much i hope you enjoyed the last two and a half hours and the insights that we provided the granularity and the question answered we are very confident about 26 We don't want to talk so much about the markets as we cannot influence. We can influence many things, but not the market and not the ethics. We took decisive actions last year to enable us to outperform the markets also going forward significantly our peers we like the comparison we are competitive but we also see that our organization is moving ahead and gaining market share as a key element also the name of the game in 2026 driven by innovation driven by incremental value for our customers, for the stakeholders, taking pain out of their, let's say, daily life. That's where we are best in. And at the same time, making sure that we are also benefiting and also our shareholders are benefiting by increased margins as we grow our business in the market. With that, I close our session here, but I would like to invite for all those that are here present to join us for a quick small lunch, and we can continue to chat. And for those that are virtual, I thank you for participating, and I wish you a nice weekend, and see you sometime somewhere in the near future. Thank you.