Sika: Upgrading to N and removing from Negative Catalyst Watch

Research evidence excerpt

Sika: Upgrading to N and removing from Negative Catalyst Watch

reviously: 11x)

given we see limited further downside earnings risk. Specialist Sales contact details:

• Sika Feedback from Industrials Conference. Below we provide more SamEuropeanEdmundsIndustrials- Specialist Sales -

detailed takeaways from our meetings with Sika at our Industrials Conference, (44-20) 7742-8733

but as a summary the CFO stated that Q2 is expected to show improving trends sam.edmunds@jpmorgan.com

in the Americas and Europe, with APAC’s Q2 trends similar to Q1 but an Ian Mitchell - Specialist Sales -

improvement coming in China in H2. The group’s overall guidance for 1-4% European Energy

revenue growth in local currencies this year assumed a minimal pricing (44-20) 7134-1356

contribution; the pricing component is now expected to be greater than initially ian.e.mitchell@jpmorgan.com

assumed, but volumes are likely to be lighter than initially expected. The Key Changes (FYE Dec)

guidance also assumes a 1.5% contribution from M&A. Regarding margins, Prev Cur Δ

60-70bps of positive impact is expected from cost savings and a further 10- EV/EBITDA - 27E 11.7 12.8 1.1x

20bps from synergies at MBCC. Price increases may have an adverse impact,

Style Exposure

and margins may therefore be skewed towards the bottom end of the guidance

or may be below, but if it is below, it will be because of better top-line and so

absolute EBITDA will be higher. On capital allocation, leverage is expected to

decrease slightly this year and while the company does not intend to do large

transactions it does have a solid pipeline in place.

• Building Materials sector takeaways from Industrial Conference. We also

published a dedicated report on the takeaways from all of our companies