MOSCOW (MRC) -- Sika has provided a financial update and says that its sales decreased 2.9% in 2020 to 7.88 billion Swiss francs (USD8.85 billion), mainly due to strong negative currency effects, said Chemweek.
Sales in local currencies increased 3.4% with a strong acquisition effect of 7.2% offsetting a 3.8% organic decline in sales. Meanwhile, sales in local currencies in the fourth quarter went up 5.5% year on year, of which 4.1% was organic growth, the company says.
"The 2020 fiscal year was overshadowed by the global coronavirus pandemic, which had a number of serious repercussions for the construction and automotive sectors. Thanks to the strong motivation of our employees and their pronounced customer focus, Sika managed to perform successfully in this highly challenging market environment and achieve above-average results,” says Paul Schuler, CEO of Sika.
Despite the “significant restrictions on construction activity” caused by COVID-19 in most of the countries where the company operates, Sika says it grew more strongly than the market in all regions. Sika posted 12.6% growth in sales in local currencies in the APAC region in 2020, 4.4% growth in EMEA, and an 1% increase in the Americas. The company’s global business recorded an 11.2% decrease in sales in local currencies in 2020.
Sika anticipates an over-proportional increase in EBIT and an EBIT margin of about 14% for 2020. The company has also confirmed its 2023 targets, including annual growth of 6%-8% in local currencies through 2023. The company is aiming for a higher EBIT margin of 15%–18% from 2021. It also estimates that projects in the areas of operations, logistics, procurement, and product formulation should result in an annual improvement in operating costs equivalent to 0.5% of sales.
Sika is scheduled to release its full results on 19 February.
As MRC informed earlier, Sika commissioned a manufacturing facility in Dubai, United Arab Emirates (UAE), which produces epoxy resins aimed at flooring solutions. Sika has decided to invest in the expansion of its manufacturing facilities at the Dubai site in order to increase flexibility in production, shorten delivery times, optimize cost structures, and reduce inventories.
We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.
Sika is a specialty chemicals company with a leading position in the development and production of systems and products for bonding, sealing, damping, reinforcing, and protecting in the building sector and motor vehicle industry. Sika has subsidiaries in 101 countries around the world and manufactures in over 200 factories. Its more than 20,000 employees generated annual sales of CHF 7.09 billion in 2018.