Sika AG Q3 Results Overview

Shares of Sika AG (SIX:SIKA) declined on Friday following its third-quarter results, which Citi Research described as "marginally light."

At 6:57 am (1057 GMT), Sika AG was trading 1.1% lower at CHF 245.30.

The company reported quarterly revenue of CHF 3,080 million, down 0.8% year-on-year, aligning closely with market expectations at a variance of just 0.3%.

Sika's EBITDA for the quarter amounted to CHF 609 million, reflecting a year-on-year decline of 2.1%.

Margins and Forecasts

The third-quarter EBITDA margin stood at 19.8%, slightly below last year’s 20% and the market consensus of 20.2%. Citi had estimated a more optimistic margin of 20.7%.
Citi noted that this softer-than-expected result could apply slight downward pressure to Sika's 2024 consensus forecasts.

Despite these figures, the company maintained its full-year guidance of a 6-9% sales growth in local currencies, expecting a disproportionate increase in EBITDA.

Citi analysts have noted that projected topline growth for 2024 is expected to reach approximately 6.8%, slightly conservative compared to market consensus of 7.5%.

Regional Performance

Sika’s results were influenced by regional performance differences:
– EMEA: Steady demand driven by infrastructure and commercial construction.
– Americas: Benefited from U.S. infrastructure projects.
– Asia-Pacific: Experienced modest growth as distribution gains were offset by weaker project activity, particularly in China.

Citi analysts summarized, “The 3Q’24 EBITDA is marginally light, and is likely to have a neutral to slightly negative impact on the 2024 consensus estimates.”