Sika Raises Midterm Earnings Goals, Combines Auto and Industry Segments

By David Sachs

Sika lifted its midterm earnings targets on the back of a new business strategy and what it called a strong market position.

The Swiss chemical company and car-industry supplier on Tuesday raised its annual sales growth target to between 6% and 9% to 2028, in local currencies, from 6% to 8% to 2023. The move comes despite a volatile market in the short term, Sika said. Trends like increasing world population, urbanization, resource scarcity, digitalization and climate change will drive demand, Sika said.

Under its 2028 strategy, Sika now targets an earnings margin before interest, taxes, depreciation and amortization of 20% to 23% compared with a goal of almost 19% in 2022, it said. The company said it is counting on enhanced leverage, operational efficiency and improving material margins for reaching the new goal.

The firm said it will combine its automotive and industry segments in each geographic region starting Jan. 1 to capitalize on demand for electric mobility and renewables.

The company maintained its midterm goal for operating free cash flow above 10% of net sales, it said.

Sika said it is targeting a cut to greenhouse gas emissions of 20% by 2028, using 2022 levels as its baseline. It also aims to cut water discharged per ton by 15% versus 2023 levels.

Write to David Sachs at david.sachs@wsj.com

(END) Dow Jones Newswires

October 03, 2023 02:14 ET (06:14 GMT)

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