The following is a summary of the Sika AG (SXYAY) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Sika achieved 14.5% growth in local currency for 2023, with a slower growth in Swiss Francs (7.1%) due to currency fluctuations.

• Reported EBIT was slightly below the previous year, but adjusting for one-off costs from acquisitions, EBIT performance increased by 80 basis points, to 15%.

• Record operating free cash flow of CHF1.37 billion was reported, showing an increase of nearly 60%.

• Sika reported record sales of CHF11.24 billion, marking a 14.5% growth in local currency, and 7.1% in Swiss francs.

• Materially, the margin rose from 49.4% to 53.6%, indicating a robust expansion by 420 points.

• The EBITDA level hit a record of CHF2.45 billion, marking a 4.1% increase.

• The reported net profit was CHF1.062 billion, a decline of 8.6%.

Business Progress:

• Sika is focusing its efforts on EMEA, exploring growth opportunities in sectors like infrastructure, data centers, e-commerce, and more.

• The company has successfully integrated the newly acquired MBCC into its operations, extending its footprint in the retail in the DACH region.

• North America faced slightly negative organic market development in 2024, but positive development is expected in the second half.

• Sika is investing in data center facilities and is gaining momentum in sustainable energy projects.

• Infrastructure projects in China and India contribute to the company's growth.

• Sika is expanding its successful distribution model to other countries in Asia Pacific, taking advantage of growing manufacturing hubs.

• The company has an ongoing commitment to sustainability with efforts to reduce CO2 emissions, waste, and water consumption.

• Sika completed major investments in 2023 of the MBCC transaction and achieved CHF41 million in synergies within the first eight months of acquisition.

• The company aims for a 6% to 9% growth in local currency and over-proportional EBITDA growth for its financial target for 2024.

• Sika is also advancing in the direction of digitalisation and dealing with raw material scarcity by exploring alternatives.

More details: SIKA AG UNSP ADR EACH REP 0.10 ORD SHS IR

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