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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