Double-Digit Growth in All Regions
Sika generated record figures in all regions during the first half of 2021 despite the coronavirus pandemic continuing to seriously impact business, especially in the emerging markets.
2021 is expected to see broad economic recovery in Europe with forecasts predicting economic growth of around 4.5%. The primary sources of stimulus for the overall economy, including the construction industry, are the pickup in international trading activities, public subsidies, and the ratification of national investment programs. Growth of 3.8% is predicted for the construction sector in 2021.
Within the Sika Group, the distribution business in the EMEA region provided a strong source of growth during the first half of 2021. Furthermore, renovation activities in the private residential sector turned in a highly dynamic performance. Sika’s sales in this segment increased significantly during the period under review.
The company also gained various new customers in its project business. For example, Sika provided high-performance solutions for rail and tunnel construction projects in Norway and Croatia. It also supplied structural glazing adhesives for the Bernabéu Stadium in Madrid, while its industry solutions were used in the expansion of Munich Airport.
In the period under review, Sika acquired Kreps LLC, a leading manufacturer of mortar products in Russia, thereby further expanding both its existing product portfolio and its geographical presence.
In the Americas region, the COVID-19 situation had a varying impact on business during the first half of 2021. The United States largely returned to normal thanks to a widespread vaccination rollout, while lockdowns persisted in some parts of Canada. Due to low vaccination rates, the COVID-19 situation is not yet under control in Latin America.
Nevertheless, the market environment for Sika remains positive throughout the region since construction sites remain operational. The primary growth drivers are state funded investment and infrastructure programs, the mining boom caused by international raw material shortages, and the huge increase in e-commerce and the distribution business. By leveraging these opportunities, Sika was able to systematically expand its business in these areas during the first six months of 2021. In the Americas region, Sika’s strategic focus on big cities continues to pay off, as does the successful cross-selling of solutions from all Target Markets in the project business.
In the period under review, Sika acquired the flooring adhesives business segment of DriTac, a US-based company with a strong market position in the area of wood floor bonding. Furthermore, BR Massa, a leading manufacturer of mortar products in Brazil, was brought into the Sika Group. Thanks to this acquisition, Sika will improve its position in one of the leading economic regions of Brazil as well as expand its production capacity.
China, the biggest economy in Asia, has returned to an upwards trajectory with growth of around 13% in the first six months of the current financial year. The situation in Japan was more challenging, as the government stepped up lockdown measures and shut down construction activities during the first half of 2021 in a bid to keep infection rates low in the run-up to the Olympic Games.
In the Pacific region, the Australian economy picked up to achieve moderate growth of 1.1%. Despite pandemic pressures and a low vaccination rate, the construction sector in Southeast Asia grew by just under 8%. In China, Sika primarily benefited from major investments in infrastructure expansion, including the 5G mobile phone standard, data centers, and transport links.
Moreover, the number of sales outlets stocking Sika’s products and solutions in China was further expanded to 120,000. Sika’s business in Australia also performed dynamically, benefiting considerably from – inter alia – the marketing of the company’s mining solutions and the expansion of the concrete admixture and concrete reinforcing fiber business. The national subsidiaries in Southeast Asia returned to double-digit sales growth of just under 13% despite high numbers of coronavirus cases. The biggest growth area was the distribution business.
During the period under review, Sika acquired Hamatite, the adhesives division of Yokohama Rubber Co., Ltd. Hamatite is a market leader in Japan, offering adhesives and sealants for the automotive and construction industries. The acquisition significantly improves Sika’s position in the Japanese market, giving it more comprehensive access to all major Japanese automotive manufacturers and a broader range of sealants and adhesives for the Japanese construction sector.
After last year’s market slump, production rates in the automotive markets in all regions are significantly higher at the mid-point of the current financial year despite a persistent shortage of electronic components. The number of vehicles produced in North America in the first half of 2021 rose by around one third year-on-year; the equivalent figures for China and Europe were 25% and 28% respectively. Despite this significant growth, sales figures will not yet match 2019 levels. Overall, growth of 10% is forecast for the automotive sector in 2021.
During the first half of 2021, Sika benefited from positive growth stimuli in the automotive business. It is particularly noticeable that the transition from traditional drive systems to electromobility has picked up momentum during the pandemic thanks to various local support programs and the wide range of electric vehicles now available on the market.
Sika is developing innovative products for various applications in electric vehicles for its customers, including, for example, adhesive and fire protection solutions for modern battery systems. Sika anticipates long-term growth stimuli from the megatrends evident in modern automotive construction – electromobility and lightweight construction.
Worldwide Market Presence
The Regions in Brief
|Net sales in CHF mn (previous year)||2,036.4 (1,626.6)||1,100.5 (950.5)||960.8 (759.9)||351.0 (277.6)|
|Growth in local currencies||24.1%||19.5%||26.0%||27.6%|