Sika is confident that it can handle rising commodity prices
- Sales growth of 13 to 17% in local currencies this year
- Experience greater increase in operating profit
- Cost savings to increase margins in the years to come
ZURICH, Oct. 7 (Reuters) – Sika (SIKA.S) may overcome rising raw material costs and supply chain restrictions to increase sales and profit margins this year, the Swiss maker of construction chemicals.
The company, whose products are used to seal, strengthen and protect building materials, said it expects sales growth in local currencies of 13% to 17% this year, and a higher increase. operating profit, confirming previous forecasts.
The operating profit margin (EBIT) will reach 15% for the first time this year, he added, “despite difficult raw material prices and supply chain restrictions.” In 2020, it posted an EBIT margin of 14.4%.
In a statement ahead of its Investor Day, Sika also confirmed its targets for 2023, saying it still aims for local currency sales growth of 6-8% per year and expects to increase operating profit margins. at 15 to 18% from 2021.
The outlook confirmed the directions given by the company in its half-year results in July.
The improved margins would come from cost savings in operations, logistics, purchasing and product formulations, he said.
These are expected to translate into an annual improvement in operating costs equivalent to 0.5% of sales, said Sika, which also aims to reduce its carbon emissions.
Chief Executive Thomas Hasler, who took over as CEO in May, said Sika will continue to seek acquisitions and new products to meet its goals. The company has already made seven acquisitions this year.
“Our business has great potential for future growth and long-term success,” he said.
Reporting by John Revill and Silke Koltrowitz Editing by Riham Alkousaa and Mark Potter
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