Sika Makes Less Profit Despite Revenue Increase in Difficult Environment
Published: Friday, Oct 20th 2023, 05:20
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Sika, a building chemistry and adhesive manufacturer, has continued to grow despite a difficult economic environment. Negative currency effects and high acquisition and integration costs have slowed the Swiss company down. From January to September, sales increased by 5.6% to 8.45 billion Swiss francs, mainly due to the acquisition of MBCC in May. The acquisition effect was 11.1%. However, the strong Swiss franc had a strong impact, with sales increasing by 12.4% in local currencies. The economic and geopolitical environment was challenging, according to Sika. The strong interest rate increase dampened the construction industry. Despite this, Sika reported strong results due to its leading technologies. The operating profit (EBIT) decreased by 7.1% to 1.15 billion Swiss francs due to acquisition and integration costs of 105.3 million Swiss francs, as well as a lower book profit (168 million Swiss francs) from the sale of a company part. As a result, net profit was 17% lower at 736.5 million Swiss francs. For the current fiscal year 2023, Sika expects an increase in local currency sales of more than 15%, including the acquired MBCC. However, MBCC is not included in the profitability target. The EBIT margin is expected to increase disproportionately to sales.
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