Early identification of possible risks

As a global player, Sika is exposed to a variety of risks. Ensuring the Group’s freedom of action at all times, safeguarding its image, and protecting the capital invested in Sika, necessitates the timely analysis of potential risks and their integration into strategic decision-making processes.

Risks and opportunities

Flawed risk assessments may seriously impair a company’s reputation and limit its freedom of action. Well aware of this, Sika reacted years ago by introducing a comprehensive risk management system at Group level and for all its subsidiaries. Risks should be identified at an early stage and integrated into strategic decision-making processes. Risk management may assist in the identification of new opportunities and thereby help to generate added value.

Group Management and Board of Directors

Whereas Sika’s Group Management regularly reviews the processes underlying risk management, the Board of Directors bears ultimate responsibility for risk assessment. Its duties include the annual reassessment of the risk situation at Group level. All risks are assessed in terms of a few basic questions:

  • Is the risk global or regional in scope?
  • What implications does the risk have for the Group?
  • How high is the probability of losses occurring?
  • What measures need to be implemented to prevent the risk or mitigate its consequences?


If a risk is rated critical in the overall assessment, effective measures are then taken to reduce the probability of, or prevent its occurrence, or limit its implications.

Sika pursues a risk-based management approach along the entire value chain, from procurement and production, to marketing.

Customers and markets

Sika has a policy of strategic diversification to limit market and customer-related risks. Geographical diversification is tremendously important in the locally based construction industry, given the sometimes contrary business trends witnessed in this sector in different regions of the world. Customer diversification – with no single customer accounting for more than 2.5% of Sika’s turnover – is another stabilizing factor. As a further safeguard against economic fluctuations, Sika operates both in the new-build sector and in the less cyclical renovation and maintenance market.

Financial risks

The purpose of financial risk management is to optimize funding and achieve a liquidity position geared to financial obligations. Liquidity is ensured by means of long-term bonds.

Liquidity is optimized by means of a cash-pooling arrangement. Sika also manages its net working capital with the utmost prudence. For example, the local companies have precisely defined processes for handling accounts receivable. A cost structure dovetailed to the prevailing market conditions ensures adequate cash generation. Sika attaches high priority to open and cost-efficient access to capital markets. In this context, the A-/ stable rating of Standard & Poor’s must be taken into account.

Internal Audit

Internal Audit carries out audits as set out in the annual audit plan, approved by the Audit Committee. The internal audits are primarily for Group companies in the areas of sales, accounts receivable and accounts payable management, product development, purchasing, production, inventory management, financial and operational reporting, payroll processes, and IT management. In addition to the global audit of sales and production companies, regular in-depth audits are carried out in the area of headquarter functions and Group-wide support processes. Internal Audit is an instrument of the Board of Directors and reports to the Audit Committee.

Financial risk management is described in greater detail on page 129 et seq. of the download version of this report.

Supplier management and raw material procurement
Supplier management and raw material procurement
Logistics and production
Production and logistics
Product Development and Marketing
Product Development and Marketing