Press Release: Sika AG: RECORD SALES AND PROFIT

Sika AG / Sika AG: RECORD SALES AND PROFIT. Processed and transmitted

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content of this announcement.

-- Sales growth of 7.9% in local currency (6.8% in CHF) to CHF 4,627.5

million

-- Growth in all regions

-- Operating result (EBIT) up 13.2%, net profit 14.9% higher

-- Growth strategy continues with two more national subsidiaries, four new

factories and three acquisitions

-- Confirmation of 2017 annual targets - annual sales expected to exceed CHF

6 billion for the first time

With sales growth of 7.9% in local currency, Sika continued on its

successful growth trajectory in the first nine months of the current

financial year, achieving record sales of CHF 4,627.5 million. As part

of the implementation of the strategic targets for 2020, two further

national subsidiaries were founded, four new factories opened and three

acquisitions made - the aim being to press ahead with the expansion in

high-growth business areas and markets. Sales growth in Swiss francs

over the past nine months came to 6.8% after taking a negative currency

effect into account (-1.1%).

MARGINS AND NET PROFIT HIT RECORD HIGH

In the third quarter, Sika posted its 23rd successive improvement in

margins. This outstanding result was achieved thanks to Sika's

successful growth model. Volume grew faster than operating costs,

compensating for slightly negative currency effects and rising raw

material prices. The operating result and net profit therefore hit

record highs in the first nine months of 2017. Operating profit (EBIT)

improved by 13.2% to CHF 669.0 million (previous year: CHF 591.2

million). Net profit rose strongly by 14.9% to CHF 477.4 million

(previous year: CHF 415.5 million).

Paul Schuler, Chief Executive Officer: "With a further sales increase of

7.9%, which is at the upper end of our defined target range, as well as

a 14.9% surge in net profit, we are systematically delivering our growth

model and achieving record results. We are positioning ourselves early

in emerging economies and are well established in mature markets. This

enables us to sell our product solutions at all stages of the life cycle

of construction properties, from new-build to refurbishment work. This

has resulted in excellent double-digit growth rates in Eastern Europe,

Africa, North America, and the Pacific area, with our growth

significantly outpacing that of the market in many countries. In the

automotive business we are benefiting from the trend towards lightweight

construction, and our sales growth is once again firmly in double

digits."

GROWTH IN ALL REGIONS

Sales in region EMEA (Europe, Middle East, Africa) increased by 6.5% in

the first nine months (previous year: 5.3%). The core markets of France,

Italy and the UK achieved solid growth rates. Eastern Europe and Africa

experienced double-digit growth. Dar es Salaam, Tanzania, saw its first

factory for concrete admixtures brought into operation, while concrete

admixture and mortar production in Almaty, Kazakhstan, was relocated to

a new, expanded site. In Russia, a new production line for PVC membranes

was set up at the factory in Lobnya, near Moscow. Just recently,

manufacturing capacity was expanded at Lahore, Pakistan, with the

opening of a new factory for mortar products and concrete admixtures. In

addition, Sika's presence in West Africa was further strengthened

through the founding of a new national subsidiary in Senegal.

In the first nine months Bitbau Dörr, a leading supplier of

waterproofing systems, was acquired in Austria, while ABC Sealants, a

well-known manufacturer of sealants and adhesives for the interior

finishing sector, was taken over in Turkey. KVK Holding, which is based

in the Czech capital, Prague, also joined the Sika Group. The company is

an established supplier of waterproofing and roofing systems as well as

a wide range of mortar products.

At 16.7%, the North America region posted the strongest growth once

again (previous year: 9.9%), of which 8.2% was through acquisitions.

Sika boosted its business volume significantly in the USA achieving

growth of around 20%, thus continuing to grow much more quickly than the

construction market. Targeted investments in North America contributed

substantially to this positive business performance. These include the

development of the sales organization, the acquisition of companies and

the significant expansion of the supply chain with new factories located

close to fast-growing metropolitan areas. The conclusion of the takeover

of Rmax Operating, LLC during the reporting period enabled a leading US

manufacturer of polyiso insulation for complete building envelope

solutions (roofing and wall systems) to be integrated into the Sika

Group.

The Latin America region increased sales by 1.7% in the first nine

months, compared with 5.6% in the same period last year. Some large

countries in the region, including Mexico and Argentina, produced

above-average performance. In Brazil, the persistently difficult

economic and political situation continued to have a negative impact on

business performance. Furthermore, construction activity has been

subdued in countries that are dependent on the raw material sector. The

supply chain in Mexico was further expanded through investment in a new

factory for mortar products and concrete admixtures in Coatzacoalcos.

Sika's presence in Central America was also reinforced by the foundation

of a new national subsidiary in El Salvador.

Sales in the region Asia/Pacific rose by 4.8% (previous year: 3.8%). The

markets in Southeast Asia, with the exception of Indonesia and Singapore,

achieved high growth rates. In Singapore, investment in state-funded

residential construction projects, and in Indonesia investment in

infrastructure, remained at a low level. In China, the construction

industry stabilized further, enabling Sika to achieve high single-digit

growth.

OUTLOOK FOR 2017

The strategic targets for 2020 were successfully implemented in the

first nine months of 2017, leading to record results. The strong

performance supports the target for the full year - namely, a 6-8%

increase in sales to more than CHF 6 billion for the first time.

Volatile and rising raw material prices present a challenge in the

current year. Operating profit (EBIT) is expected to once again increase

at a disproportionately high rate, reaching between CHF 880 million and

900 million for the full-year 2017. The unknown outcome of

Saint-Gobain's hostile takeover attempt remains an element of

uncertainty for the future.

KEY FIGURES NINE MONTHS 2017

in CHF mn 1/1/2016 -9/30/2016 1/1/2017 -9/30/2017 Change in %

Net sales 4,331.8 4,627.5 6.8

Gross result 2,396.7 2,532.5 5.7

Operating profit before

depreciation (EBITDA) 719.5 797.9 10.9

Operating profit (EBIT) 591.2 669.0 13.2

Net profit 415.5 477.4 14.9

NET SALES BY REGION

1/1/2016 1/1/2017 Change compared to prior year

in CHF mn -9/30/2016 -9/30/2017 (+/- in %)

In local Currency Acquisition

In CHF currencies(1) impact effect

By region

EMEA 2,056.5 2,136.9 3.9 6.5 -2.6 1.9

North America 705.0 826.3 17.2 16.7 0.5 8.2

Latin America 420.5 435.0 3.4 1.7 1.7 0.0

Asia/Pacific 785.5 820.5 4.5 4.8 -0.3 0.9

Other segments and

activities 364.3 408.8 12.2 12.0 0.2 0.0

Net sales 4,331.8 4,627.5 6.8 7.9 -1.1 2.4

Products for construction

industry 3,401.7 3,631.8 6.8 8.0 -1.2 3.0

Products for

industrial manufacturing 930.1 995.7 7.1 7.3 -0.2 0.0

(1) Including acquisitions

Conference call today, October 26, 2017 at 3.00 p.m. (CET)

In connection with the publication of the results for the first nine

months a conference call will be held today. Please dial in 10 to 15

minutes before the start at:

+41 (0)58 810 7027 (Europe, Asia)

+1 (1)631 570 5613 (North America, Latin America)

+44 (0)207 107 0613 (UK)

An operator will connect you with Paul Schuler (CEO), Adrian Widmer

(CFO) and Dominik Slappnig (Head Corporate Communications & IR).

The conference call will be recorded and remains retrievable for 24

hours under the following numbers:

+41 (0)91 612 4330 (Europe, Asia)

+1 (1)631 982 4566 (North America, Latin America)

+44 (0)207 108 6233 (UK)

Upon request please enter the code 14766 followed by the #sign.

FINANCIAL CALENDAR

Net sales 2017 Tuesday, January 9, 2018

Media conference / analyst presentation Friday, February 23, 2018

on full-year results 2017

Sales first quarter 2018 Tuesday, April 17, 2018

50(th) Annual General Meeting Tuesday, April 17, 2018

Half-year report 2018 Thursday, July 26, 2018

Results first nine months 2018 Thursday, October 25, 2018

CONTACT

Dominik Slappnig

Corporate Communications & Investor Relations

+41 58 436 68 21

slappnig.dominik@ch.sika.com

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October 25, 2017 23:00 ET (03:00 GMT)