Sika, the Swiss chemical company and car-industry supplier, has announced an upward revision of its midterm earnings targets. This revision is attributed to the implementation of a new business strategy and Sika’s strong market position. Despite short-term market volatility, Sika has raised its annual sales growth target to between 6% and 9% in local currencies until 2028, compared to the previous target of 6% to 8% until 2023. Sika foresees an increased demand driven by trends such as population growth, urbanization, resource scarcity, digitalization, and climate change.
As part of its 2028 strategy, Sika aims to achieve an earnings margin before interest, taxes, depreciation, and amortization of 20% to 23%. This goal represents a significant increase from the previous target of almost 19% by 2022. Sika plans to leverage operational efficiency, improved material margins, and enhanced leverage to accomplish this objective.
To capitalize on the growing demand for electric mobility and renewables, Sika will merge its automotive and industry segments in each geographic region. This strategic move will enable Sika to effectively cater to the needs of these emerging markets.
Despite these changes, Sika maintains its midterm goal of operating free cash flow above 10% of net sales.
In line with its commitment to sustainability, Sika is targeting a 20% reduction in greenhouse gas emissions by 2028, using 2022 levels as a baseline. Additionally, the company aims to reduce water discharge per ton by 15% compared to 2023 levels.
Overall, Sika’s revised earnings targets and new business strategy showcase its ambition to adapt and thrive in an ever-changing market environment.