SIKA AG

Sources: Sika Annual Reports and ad hoc full-year releases for 2021 (18 Feb 2022), 2022 (17 Feb 2023), 2023 (16 Feb 2024), 2024 (21 Feb 2025), 2025 (20 Feb 2026); 2022 and 2023 Financial Reports. All CHF M. Ratios computed by the analyst where marked (c).

Income statement

Notes: (1) FY2022 net profit includes a CHF 166.5 M gain on the industrial coatings divestment. (2) FY2023 EBIT includes CHF 131.5 M of MBCC acquisition and integration costs; acquisition-adjusted EBIT was CHF 1,680.6 M. (3) FY2023 net profit shown as CHF 1,062.6 M per the FY2024 release comparative (profit attributable to shareholders CHF 1,062.0 M per the 2023 Financial Report). (4) FY2025 includes Fast Forward one-off costs of CHF 108 M, of which CHF 86 M (CHF 86.2 M) within EBITDA; adjusted EBITDA margin 19.2%. (5) FY2021 basic EPS of CHF 6.91 is from the FY2022 key-figures table; the 2022 Financial Report lists diluted EPS of 6.60 (2021) and 7.29 (2022); the basis difference reflects the convertible bond outstanding before its 2023 conversion. (6) FY2024 basic and diluted EPS were both CHF 7.76 per company releases.

Margins

Compound annual growth (c), FY2021–FY2025: net sales +4.9% p.a. in CHF; EBITDA +4.1% p.a.; EBIT +1.8% p.a.; net profit −0.1% p.a.; DPS +6.3% p.a. The 2022 adjusted EBIT margin of 14.2% (company) strips the coatings divestment gain.

Balance sheet

Directionally, Sika states it reduced net debt in both 2024 and 2025 on the back of free cash flow. The large step-up in total assets in 2023 (CHF +3.7 bn) reflects the MBCC acquisition (cash outflow for acquisitions net of cash acquired CHF 3,235.5 M in 2023), funded by cash on hand (cash fell from CHF 1,873.3 M to CHF 643.9 M), bank debt and bond issuance. For reference, a data-vendor snapshot of the June 2025 balance sheet showed total debt of ≈CHF 3.89 bn and cash of ≈CHF 1.87 bn (TradingEconomics; not reconciled to the half-year report). At 30 June 2026, total assets were CHF 16,017.3 M, equity CHF 6,817.2 M, and the equity ratio 42.6%.

Cash flow

Notes: FY2023 operating free cash flow was originally reported at CHF 1,372.7 M (+58.7%) and is shown at the restated CHF 1,441.5 M used as the comparative in the FY2024 release; the discrepancy reflects a definitional/restatement change not detailed in the press materials. Dividends approved: CHF 3.70 per share for FY2025 (paid ~30 March 2026), half from capital-contribution reserves (withholding-tax-free for eligible holders).

Returns and efficiency ratios

FY2025 ROCE adjusted for both acquisitions and Fast Forward one-offs was 19.0% (company).

Commentary on trends, inflections and drivers

2021–2022: Price-led record growth. Sika delivered 17.1% local-currency growth in 2021 and 15.8% in 2022 in an environment of severe raw-material inflation. The company protected EBIT margins (15.0% and 15.1%) through price increases, cost discipline and acquisition synergies; reported 2022 EBIT was flattered by the CHF 166.5 M coatings divestment gain (company-adjusted EBIT margin 14.2%). Operating free cash flow dipped to 8.2% of sales in 2022 as working capital absorbed inflation.

2023: MBCC inflection. Sales rose 7.1% in CHF (14.5% LC), the difference reflecting a strong franc. MBCC consolidation from May lifted sales but EBIT included CHF 131.5 M of one-offs, depressing reported margins (13.8%) while adjusted EBIT margin rose to 15.0%. Cash generation inflected to a record (CHF 1.37–1.44 bn depending on basis), as working capital normalized. The balance sheet roughly 1.3x-ed, and reported ROCE fell to 16.3% (23.5% excluding acquisitions), illustrating the capital intensity of the purchase price.

2024: Peak earnings. EBITDA grew 11.0% to CHF 2,269.5 M (19.3% margin), net profit hit a record CHF 1,247.6 M and diluted EPS rose 16.7% to CHF 7.76, helped by MBCC synergies, a full-year MBCC contribution and a 54.5% material margin. Americas LC growth of 11.2% was the standout.

2025: Trough on three headwinds. Reported sales fell 4.8% because of a 5.4% FX headwind (weak USD), negligible organic growth (−0.4%; +1.2% ex-China construction) and Fast Forward one-offs (CHF 108 M). EBITDA fell 9.0%, EBIT 12.9% and net profit 16.2%. Underlying quality was resilient: material margin improved 40 bps to 54.9%, adjusted EBITDA margin was 19.2%, and operating free cash flow conversion improved to 12.1% of sales. NWC intensity fell from 19.7% to 18.5% of sales.

H1 2026: Organic re-acceleration. Organic growth of 2.9% (Q2: 5.7%) and LC growth of 4.0% (Q2: 6.8%) marked a clear turn, with material margin up 60 bps to 55.7%. However FX (−5.5%) kept reported sales down 1.5%, and input-cost inflation (linked by analysts to Middle East-related raw material and supply chain volatility) prompted management to lower the FY2026 EBITDA margin guidance from 19.5–20.0% to 19.0–19.5%. Seasonal working-capital build reduced H1 operating free cash flow to CHF 139.6 M.

Structural observation. Over 2021–2025, CHF-reported sales compounded at ~4.9% per year while EPS was essentially flat (diluted 6.60 → 6.50), because (a) the 2023 conversion of the convertible bond increased the share count, (b) MBCC added amortization, interest and integration costs, and (c) the franc's strength reduced translated earnings. The investment case therefore hinges on whether Fast Forward savings (CHF 150–200 M by 2028) and organic outperformance can restore EPS growth at the ~10% p.a. that some brokers (e.g., ZKB) assume.

Management guidance (as of 28 Jul 2026, reconfirmed at 1 Oct 2026 Investor Day for Fast Forward)

• FY2026 sales growth: 3%–6% in local currencies (raised from 1%–4%).

• FY2026 EBITDA margin: 19.0%–19.5% (lowered from 19.5%–20.0%); management "comfortable" with consensus CHF EBITDA.

• Fast Forward: ~CHF 80 M savings in 2026; CHF 150–200 M annual savings by 2028.

• Market: global construction expected to remain muted in 2026.

• Strategy 2028 medium-term targets reaffirmed (3%–6% LC growth; 20%+ EBITDA margin ambition; OFCF >10% of sales).

Consensus expectations

Consensus figures (MarketScreener) imply P/E compression from 22.6x (2026e) to 20.1x (2027e), i.e., roughly 12% EPS growth in 2027. Some brokers (ZKB) model ~10% medium-term EPS CAGR.

Bull case (grounded in the data)

1. Organic inflection is real: Q2 2026 organic growth of 5.7% (vs −0.2% in Q1) across all regions, with share gains of ~2+ pts p.a. versus peers, suggests a return toward the 3%–6% LC target even in a muted market.

2. Self-help earnings bridge: CHF 150–200 M of Fast Forward savings by 2028 (≈7%–10% of 2025 EBITDA), plus non-recurrence of CHF 86 M in 2025 EBITDA one-offs, plus a material margin at 55.7%, can lift EBITDA margins back above 20%.

3. Mix shift to structural growth niches: Data centers (double-digit growth), Middle East infrastructure, India/SE Asia, and adhesives distribution (Akkim's targeted sales doubling) reduce dependence on European and Chinese residential construction.

Bear case (grounded in the data)

1. Margin credibility: The 2026 EBITDA margin guide was cut to 19.0%–19.5% within months of being set, and the 20%+ "as of 2026" ambition has slipped; input-cost inflation could persist.

2. FX and China remain structural drags: −5.5% FX in H1 2026 and continued double-digit China construction declines mean reported CHF earnings may lag LC progress for years.

3. Capital returns diluted by M&A: Reported ROCE fell to 12.0% (H1 2026, LTM basis) from 16.3% (2023); undisclosed deal prices (Akkim, Finja) and a EUR 1 bn hybrid suggest continued capital deployment at uncertain returns, while EPS has not grown since 2021.

Catalysts and monitorables (next 12 months)

Analyst verdict

Sika enters late 2026 as a high-quality franchise emerging from a cyclical and self-inflicted trough. The franchise quality is not in doubt: the group is the global leader in construction chemicals with roughly 12% share of its markets, has expanded material margin to 55.7% through inflation and deflation, converts more than 12% of sales into operating free cash flow, and has demonstrated it can integrate a CHF 5.5 billion acquisition while lifting synergy targets. The trough, however, was also real. Between 2021 and 2025 reported sales compounded at about 5% per year, yet diluted EPS was flat, reported ROCE nearly halved from pre-MBCC levels, the medium-term growth target was cut by three percentage points, and the share price lost roughly 21% in 2024 and 24% in 2025 before bottoming near CHF 120 in spring 2026.

The second quarter of 2026 marks a credible turning point. Organic growth of 5.7% across all regions, an upgraded local-currency growth guide, a Stable S&P outlook and the closed Akkim deal give management fresh credibility, and the share price has already responded with a rebound of more than 60% from its low to about CHF 195 in August. At roughly 20–23x forward earnings, the stock again prices in a recovery; the remaining upside therefore depends on execution of two items that are within management's control: delivering the CHF 150–200 million Fast Forward savings by 2028, and converting share gains in data centers, infrastructure, Middle East and adhesives distribution into EBITDA margins sustainably above 20%. The largest unmanageable risks are franc strength, a deeper China decline and input-cost inflation, which already forced a mid-year margin cut.

On balance, we view Sika as a structurally advantaged compounder whose earnings power is understated by FX and one-offs, but whose valuation now requires visible margin delivery. The 9M 2026 print and FY2027 guidance are the decisive tests.