Sika kept impetus and growth of the first quarter also in the second and achieved a net profit enhancement of 48.3% to new CHF 60.4mil. in the first half of 2004 (previous year: CHF 40.7 mil.).

Expressed in Swiss francs, net sales improved by 15.7%, from CHF 1 069.8 mil. to CHF 1 238.1 mil.

Based on local currencies, sales increased by 14.6%. The Construction and the Industry Division increased sales, denominated in local currencies, by 14.5% and 14.8% respectively.

The less than proportional rate of rise in costs affected operating earnings before depreciation. The EBITDA rose from CHF 127.8 mil. to CHF 163.6 mil.; the EBITDA margin of 11.9% amounts to 13.2%.

Earnings from operations (EBIT) were also up increasing by 30.5%. The corresponding margin rose from 7.5% to 8.5%.

The equity ratio increased from 46.2% to 49.4%. The Board of Directors decided, based on a solid balance sheet, to redeem any as yet unredeemed bonds of its CHF 150 mil. 1% convertible bond issue of 1998 by funds drawn on the corporate treasury as well as the syndicated credit facility so far not used.

By year-end sales are expected to reach about CHF 2.5 bn. The impact of a raw material shortage on prices is difficult to estimate. However, a rise in raw material prices would impact our cost of materials in the fourth quarter at the earliest.