EMEA

Although 2016 saw Europe confronted with refugee issues, Britain’s planned exit from the European Union, and the banking crisis in Italy, the EU economy held firm and continued on its path to recovery. Germany, France, Spain and the UK – the major countries in the economic zone – remained on a growth trajectory.

In the past business year, Sika’s sales in the EMEA region (Europe, Middle East, Africa) rose by 4.6% in local currencies. The key markets Germany, France, Spain and Italy achieved good growth rates. Strong above-average growth was reported in the UK, Russia, Eastern Europe and Africa.

In the EMEA region, a new concrete admixture plant was opened in the Ethiopian capital Addis Ababa and a mortar factory came on stream in Kyroni, near Athens. New national subsidiaries were established in Kuwait, Cameroon and Djibouti.

North America

In the year under review, economic conditions in North America were characterized by a good market environment, but muted growth. Investment behavior in the second half of the year was influenced in particular by the presidential elections. Major commercial projects in the construction sector and infrastructure projects in the public sector were postponed.

Sika lifted sales in the North America region by 7.8% in local currencies. This is due in particular to the accelerated expansion of the supply chain and the investments in the sales force in fastgrowing metropolitan areas. The mild winter also contributed to a solid performance in the first half of 2016.

To provide fresh growth stimuli going forward, three acquisitions were made in the North America region: L.M. Scofield, a leading producer of color additives for concrete, and FRC Industries, a manufacturer of fibers for concrete, both joined the Group. The Rmax acquisition enables the expansion of the portfolio for building envelope, wall and roofing insulation technologies.

Latin America

Numerous Latin American countries came under renewed pressure from falling oil and commodities prices in the past business year. 2016 was a difficult year for the region, with many markets suffering visible declines. Ecuador, Venezuela and Brazil face the additional burden of fundamental structural problems.

The Group recorded a 5.1% sales increase in local currencies in the Latin America region. Mexico, Argentina and Chile all developed strongly. By contrast, the continuing economic crisis in Brazil and a significant fall in the value of some local currencies led to a downturn in business activity in several countries in the region.

Investments in Latin America included a new plant for mortar products in Guayaquil, Ecuador, an automotive factory for adhesives and acoustic solutions in São Paulo, Brazil, as well as the establishment of a new national subsidiary in Nicaragua in the capital Managua.

Asia/Pacific

Thanks to a widescale infrastructure development plan launched by the government, the Chinese economy saw a return to growth in the first half of 2016. The Southeast Asia region enjoyed strong economic momentum with robust growth rates, driven by Malaysia, Vietnam, Indonesia and the Philippines, all of which succeeded in maintaining or increasing growth impetus in 2016. The construction sector is benefiting greatly from urbanization trends, strong population growth and the advances in building standards in the region.

The Group posted a 3.6% local currency increase in sales in the Asia/Pacific region in the past business year. The extremely dynamic performance of the markets in Southeast Asia and the Pacific area translated into substantial sales gains. Contributing factors included the mortar business, the alignment of the sales organization to key project management, and expansion of the concrete admixture business. Stable growth rates were also achieved in China in the second half of 2016. In addition to its specialty construction chemicals business, Sika has also positioned itself as a strong supplier in the world’s largest automotive market and is continually growing business with local Chinese auto manufacturers, and international carmakers’ joint ventures.

In the Asia/Pacific region, leading mortar producer Ronacrete Ltd. in Hong Kong was acquired. New factories were also opened in Perth, Australia, in Saraburi, Thailand, in Phnom Penh, Cambodia, and in Yangon, Myanmar.

Change net sales / currency impact

 

2015 2016 Change prior year
(+/- in %)
   

in CHF mn

   

In CHF

In local currencies

Currency impact

By region

   

 

 

 

EMEA

2,600.2 2,695.3 3.7 4.6 -0.9

North America

839.2 922.6 9.9 7.8 2.1

Latin America

600.2 564.3 -6.0 5.1 -11.1

Asia/Pacific

1,017.3 1,080.7 6.2 3.6 2.6

Other Segments and activities

432.3 484.8 12.1 11.7 0.4

Consolidated net sales

5,489.2 5,747.7 4.7 5.5 -0.8

Products for construction industry

4,358.9 4,518.9 3.7 4.7 -1.0

Products for industrial manufacturing

1,130.3 1,228.8 8.7 8.9 -0.2
Operating profit

 

2015 2016

Change prior year

 

in CHF mn

   

(+/-)

(+/- %)

By region

   

 

 

EMEA

368.2 395.6 27.4 7.4

North America

134.0 166.0 32.0 23.9

Latin America

110.4 109.2 -1.2 -1.1

Asia/Pacific

177.2 205.7 28.5 16.1

Other segments and activities

-116.5 -81.2 35.3 n.a.
Operating profit 673.3 795.3 122.0 18.1