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Sika AG (CH:SIKA)
:SIKA
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Sika AG
(SIKA)
75Outperform
Positive Factors
Growth Opportunities
The company's exposure to Asia, estimated at around 22% of sales, is being underestimated, with potential growth in Japan and India.
Market Position
The group is second to none in the world of construction chemicals in terms of product offering and customer service, adding value to customers and gaining market share relative to its peers.
Sales Performance
The group delivered a solid set of Q1-25 sales beating organically, but being held back by FX and scope effects.
Negative Factors
Gross Margin
The drop in gross margin, from 55.1% in H1-24 to 53.9% in Q3-24, was clearly higher than assumed.
Gross Margin Forecast
The surprisingly low Q3-24 gross margin of 53.9% triggers lower gross margin assumptions for FY-24-26.
Valuation Concerns
The stock is oversold and unloved, with many investors missing the inherent quality of the business and the continued growth opportunities around the world.
Sika AG (SIKA) vs. S&P 500 (SPY)
Market Cap
CHF30.98B
Dividend Yield1.84%
Average Volume (3M)570.70K
Price to Earnings (P/E)24.9
Beta (1Y)1.28
Revenue Growth4.67%
EPS GrowthN/A
CountryCH
Employees33,511
SectorIndustrials
Sector Strength66
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)4.17
Shares Outstanding160,479,300
10 Day Avg. Volume727,125
30 Day Avg. Volume570,701
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
Price to Cash Flow (P/CF)N/A
P/FCF RatioN/A
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF250.56Price Target Upside28.13% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Sika AG Business Overview & Revenue Model
Company DescriptionSika AG is a globally active specialty chemicals company headquartered in Baar, Switzerland. It operates in the construction and automotive sectors, providing a wide range of products and solutions. The company's core offerings include construction chemicals, such as concrete admixtures, mortars, sealants, adhesives, and roofing systems, as well as specialty industrial solutions for bonding, sealing, damping, reinforcing, and protecting load-bearing structures.
How the Company Makes MoneySika AG generates revenue through the sale of its diverse range of construction and industrial products. The company divides its operations into several business units, each focusing on specific product categories such as concrete, waterproofing, roofing, flooring, sealing and bonding, refurbishment, and industry. These products are primarily sold to construction companies, industrial manufacturers, and distributors worldwide. A significant portion of Sika's revenue comes from the construction industry, where its products are used in various applications including residential, commercial, and infrastructure projects. Additionally, Sika maintains strategic partnerships and collaborations to enhance its product offerings and expand its market reach. The company also invests in research and development to innovate and maintain a competitive edge, ensuring continued demand for its high-performance solutions.
Sika AG Financial Statement Overview
Summary
Income Statement
Balance Sheet
Cash Flow
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 11.73B | 11.76B | 11.24B | 10.49B | 9.25B | 7.88B | Gross Profit |
| 3.73B | 6.42B | 3.53B | 3.08B | 2.79B | 2.42B | EBIT |
| 1.72B | 1.71B | 1.55B | 1.57B | 1.39B | 1.13B | EBITDA |
| 2.28B | 2.30B | 2.08B | 2.00B | 1.79B | 1.55B | Net Income Common Stockholders |
| 1.23B | 1.25B | 1.06B | 1.16B | 1.05B | 824.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 997.60M | 712.90M | 648.20M | 1.88B | 1.18B | 1.32B | Total Assets |
| 9.96B | 15.98B | 15.05B | 11.48B | 10.90B | 9.94B | Total Debt |
| 4.37B | 5.72B | 5.84B | 3.89B | 3.66B | 4.14B | Net Debt |
| 3.38B | 5.02B | 5.19B | 2.02B | 2.49B | 2.83B | Total Liabilities |
| 6.80B | 8.93B | 9.12B | 6.52B | 6.50B | 6.65B | Stockholders Equity |
| 3.12B | 7.03B | 5.92B | 4.97B | 4.39B | 3.29B |
| Cash Flow | Free Cash Flow | ||||
| 1.46B | 1.38B | 1.37B | 833.80M | 893.50M | 1.24B | Operating Cash Flow |
| 1.77B | 1.74B | 1.65B | 1.10B | 1.06B | 1.37B | Investing Cash Flow |
| -654.60M | -580.70M | -3.52B | -175.40M | -469.40M | -332.00M | Financing Cash Flow |
| -1.22B | -1.08B | 694.90M | -183.60M | -736.60M | -690.10M |
Sika AG Technical Analysis
Negative
195.55
Price Trends
219.63
Negative
220.59
Negative
236.70
Negative
Market Momentum
-8.07
Negative
38.61
Neutral
64.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:SIKA, the sentiment is Negative. The current price of 195.55 is below the 20-day moving average (MA) of 204.98, below the 50-day MA of 219.63, and below the 200-day MA of 236.70, indicating a bearish trend. The MACD of -8.07 indicates Negative momentum. The RSI at 38.61 is Neutral, neither overbought nor oversold. The STOCH value of 64.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CH:SIKA.
Sika AG Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $4.50B | 17.22 | 22.45% | 2.60% | 7.58% | 14.41% | |
75 Outperform | CHF30.98B | 24.87 | 1.84% | 4.67% | ― | ||
67 Neutral | $2.68B | 10.95 | 11.11% | 4.59% | -5.14% | 82.31% | |
66 Neutral | CHF3.50B | 15.43 | 3.95% | -11.73% | -35.55% | ||
62 Neutral | $4.17B | 11.26 | 5.46% | 215.76% | 4.12% | -8.54% | |
59 Neutral | CHF13.34B | 28.96 | 25.54% | 2.77% | -5.40% | 0.70% | |
54 Neutral | CHF4.75B | 22.20 | 2.24% | -3.33% | -8.90% |
* Industrials Sector Average
Performance Comparison
CH:SIKA
Sika AG
195.55
-57.87
-22.84%
CH:BUCN
Bucher Industries AG
342.00
-19.00
-5.26%
CH:GF
Georg Fischer AG
57.95
-4.45
-7.13%
CH:SUN
Sulzer AG
133.20
22.40
20.22%
CH:EMSN
EMS-CHEMIE HOLDING AG
570.50
-115.13
-16.79%
CH:CLN
Clariant AG
8.51
-4.44
-34.32%
Sika AG Earnings Call Summary
Earnings Call Date: Feb 22, 2025 | % Change Since: -19.88% | Next Earnings Date: Jul 29, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with record-breaking revenue, profit growth, and successful integration of MBCC synergies. There was significant focus on sustainability and employee engagement. However, challenges in China and foreign exchange impacts were noted as areas of concern.Highlights
Record-Breaking Revenue and Growth
Sika achieved net sales of CHF 11.76 billion in 2024, marking a new record with 7.4% growth in local currency and 4.7% growth in Swiss francs.
EBITDA Margin Improvement
The company reported a record EBITDA of CHF 2.27 billion or 19.3% of net sales, representing an over-proportional growth of 11%.
Net Profit Increase
Net profit increased by 17.4% to CHF 1.25 billion, or 10.6% of net sales.
Employee Engagement
Sika reported a high employee engagement score of 86%, indicating strong workforce dedication.
Dividend Growth
The Board of Directors proposes a 9.1% dividend increase to CHF 3.60, up from CHF 3.30.
MBCC Acquisition Synergies
Achieved CHF 125 million in synergies from the MBCC acquisition, exceeding initial guidance.
Infrastructure and Data Center Growth
Significant projects include the longest cable bridge in North America and data center expansions, with Sika involved in over 50% of data center projects.
Sustainability Achievements
Reported a 36% reduction in accidents per 1000 employees, 10% reduction in CO2 emissions, and 7% reduction in water discharge.
Lowlights
Challenges in China
The construction market in China remained difficult due to low consumer confidence and deflationary pressures in the residential sector.
Impact of Foreign Exchange
Foreign exchange impacts contributed a negative 2.7% to the top line, equating to a reduction of CHF 311 million.
Higher Interest Expenses
Interest expenses increased by CHF 24.5 million, primarily due to additional MBCC-related financing.
Company Guidance
In the recent call, Sika highlighted its financial performance and strategic outlook for the upcoming year. The company reported a robust 7.4% growth in local currency sales, achieving a new record of CHF 11.76 billion in 2024. The EBITDA margin reached an all-time high of 19.3%, with a net profit increase of 17.4% compared to the previous year. Earnings per share rose by 49%, and the dividend experienced a 200% growth over the last decade. Regional sales growth was notable, with the Americas achieving 11% and EMEA crossing the CHF 5 billion mark for the first time. The company aims for a 3% to 6% local currency sales growth in 2025 and plans to improve the EBITDA margin to between 19.5% and 19.8%. Sika's strategic focus includes increasing market share, enhancing operational efficiencies, and leveraging synergies from the MBCC acquisition, expecting CHF 35 million in additional synergies in 2025. The company also highlighted its commitment to sustainability, reporting a 36% reduction in accident rates and significant reductions in waste and CO2 emissions.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.