SALES IN ALL REGIONS SIKA INVESTOR PRESENTATION, JANUARY 15, 2015 - PowerPoint PPT Presentation

DYNAMIC GROWTH CONTINUES – RECORD SALES IN ALL REGIONS SIKA INVESTOR PRESENTATION, JANUARY 15, 2015

1. HIGHLIGHTS AND SALES 2014

HIGHLIGHTS SALES 2014  Q4 with continued growth momentum  13.0% sales growth (8.3% in CHF) to CHF 5.57 billion (FY)  Record sales in all regions  Asia/Pacific with more than CHF 1 billion of sales for the first time  Sales up 15.2% in emerging markets  EBIT expected to exceed CHF 600 million  8 new factories in Brazil, Mexico, Indonesia, Singapore, India, Serbia and USA (2)  Strategy 2018 on track, exceeding financial targets 3

13.0% SALES GROWTH FOR 2014 RECORD SALES IN ALL REGIONS + 7.9% + 13.3% + 12.8% 0.75 North America 1.04 + 15.9% 2.73 EMEA Asia/Pacific 0.64 Latin America 2013 2014 (in CHF bn, Growth at Growth of 15.2% in Emerging Markets constant FX) 4

ACCELERATED BUILD-UP OF EMERGING MARKETS INVESTMENTS 2014 Opening of Sika plants:  7 th plant in Brazil (Aparecida de Goiânia, January 2014)  2 nd plant in Indonesia (Surabaya, May 2014)  6 th plant in India (Jhagadia, June 2014)  New plant in Serbia (Simanovci, September 2014)  2 nd plant in Singapore (Singapore, October 2014)  4 th plant in Mexico (Tijuana, October 2014) India Serbia 5

BUILD-UP OF SUPPLY CHAIN IN GROWTH MARKETS INVESTMENTS 2014 Opening of Sika plants in North America:  11 th plant in the USA (Denver, May 2014)  12 th plant in the USA (Atlanta, July 2014) USA USA 6

2. SALES PERFORMANCE 2014

SALES GROWTH BY QUARTER – 2013 / 2014 DYNAMIC GROWTH MOMENTUM 23.3% 17.8% 9.2% 14.0% 11.7% 9.6% 10.6% at constant currency 7.4% 8.2% acquisition 3.3% 5.4% 5.1% 1.2% organic 1.3% 7.0% 7.3% 6.6% 6.3% 8.2% 14.1% 3.8% -0.2% +1.1% -1.3% Q1 PY Q2 PY Q3 PY Q4 PY Q1 CY Q2 CY Q3 CY Q4 CY QuarterlyS 1’043.1 1’359.4 1’405.2 1’334.5 1’206.2 1’450.7 In CHF bn Quarterly 1.04 1.36 1.41 1.33 1.20 1.45 1.52 1.40 sales 8

SALES GROWTH BY REGION 2014 In CHF bn + 13.3% + 7.9% + 12.8% + 15.9% Growth (at constant FX) - 2.6% - 3.0% - 6.0% - 13.4% FX impact + 9.2% + 0.0% + 3.5% + 4.9% Acquisition 2.73 19% 81% Construction Industry 1.04 0.75 0.64 EMEA North America Asia/Pacific Latin America 9

FIVE-YEAR OVERVIEW NET SALES In CHF bn Sales growth in LC 5.80 18.0% Sales growth in CHF 5.57 15.5% 5.60 16.0% 13.0% 5.40 14.0% 5.14 5.20 12.0% 10.2% 5.00 10.0% 4.83 8.3% 9.4% 4.80 8.0% 6.3% 5.8% 4.56 4.60 6.0% 6.5% 4.42 5.3% 4.40 4.0% 3.2% 4.20 2.0% 4.00 0.0% 2010 2011 2012 2013 2014 10

3. STRATEGY 2018

MEGATRENDS DRIVE OUR GROWTH: URBANIZATION, NEW VEHICLE DESIGN & SUSTAINABILITY Increasing world population with Increased safety, fire, urbanization and Higher demand for water, earthquake and megacities infrastructure and quality requirements refurbishment solutions Rising demand for Sustainability: high performance Increasing demand concrete, sealing for safe-to-use and and waterproofing low-emission products New modular New vehicle design vehicle with material mix manufacturing requires bonding concepts need fast, solutions high strength bonding systems 12

STRATEGY 2018: SIKA’S GROWTH MODEL WILL DELIVER MARKET PENETRATION 6-8% GROWTH PER YEAR INNOVATION 42% - 45% OF SALES IN EMERGING MARKETS EMERGING MARKETS > 10% OPERATING PROFIT > 6% OPERATING FREE CASH FLOW ACQUISITIONS > 20% RETURN ON CAPITAL EMPLOYED VALUES 13 13 | 13 |

4. REJECTION OF PLANNED CHANGE OF CONTROL TO SAINT-GOBAIN 14

KEY EVENTS OF THE LAST 5 WEEKS  Dec 5 : In the evening board and management were informed of transaction by family and Saint-Gobain  limited discussions between Sika and Saint-Gobain during weekend, with Saint-Gobain rejecting constructive suggestions to mitigate flaws of current structure  Dec 8 : Publication of independent position of Sika board and management on transaction  Planned transaction is not in the best interest of Sika or its public shareholders  Board and management do not support transaction in its planned form  Dec 10 : Schenker-Winkler Holding requested Extraordinary General Meeting to replace 3 independent board members , including Chairman, with two nominees to gain majority in board  Dec 10 : Standard & Poor’s placed Sika on negative credit watch and will lower the rating by two notches to 'BBB', equal to the rating of Saint-Gobain if the transaction would be closed 15

KEY EVENTS OF THE LAST 5 WEEKS (CONT.)  Dec 17 : Sika presented alternative proposals to reverse value loss  Dec 23 : Ethos and 12 pension funds and investors representing 1.7% of the capital, requested to include an item on the agenda of the Extraordinary General Meeting to delete the opting out clause  Dec 28 : Chris Tanner, who was one of the two board member nominees proposed by Schenker-Winkler Holding, withdrew his candidacy stating: “The assurance I required with regard to an effective independence was not granted .”  Jan 5 : Schenker-Winkler Holding filed a petition at the cantonal court in Zug to enforce the Extraordinary General Meeting  Jan 14 : The international investors Cascade Investment L.L.C., Bill & Melinda Gates Foundation Trust, Fidelity Worldwide Investment and Threadneedle Investments together holding 8.61% of Sika's share capital (4.62% of the voting rights) expressed their active support for Sika's board of directors and management.  Jan 14 : Ethos launched support group for shareholder proposal to delete opting out provision 16

WHY SIKA CANNOT SUPPORT PROPOSED TRANSACTION Transaction structure as planned by Saint-Gobain Key implications & concerns   Acquisition of control through majority of Public shareholders (84% of capital) votes deprived of adequate compensation for change of control / fundamental change  Full consolidation of Sika in nature of investment  Increasing (reported) growth, margins and reduced capital intensity, as well as  Inherent conflicting interests on all improved geographic footprint levels: shareholders, board, management  But only 16% of economic exposure and operations  Intention to keep Sika listed / no offer to public shareholders  Significant implied complexities likely to substantially slow down Sika’s  Claimed benefits based on unsubstantiated organization and impair Sika's successful business plan to year 2019 as presented by growth model Saint-Gobain (1) (no interaction with Sika, no due diligence)  Significant limitations to materialize  Sika 2019 EBIT of CHF 840-890m synergy potential especially stemming  Plus EUR 180m additional synergies in from combination of directly competing 2019 businesses Effective and efficient integration of businesses not possible under planned structure Significant risk of negative effects outweighing potential upsides Note : (1) Saint-Gobain capital markets presentation Dec 8, 2014 17

SIKA’S GROWTH MODEL DELIVERS   High growth (2010-2013 CAGR) (1) Market penetration  From roof to floor  Sika: +5.2%  From new-build to refurbishment  Saint-Gobain CP (ES): -0.6% / -4.4% (2)  Push and pull market channels  High profitability (2013A EBIT Margin) (1)  Global technology leadership   Continuous innovations Sika: 10.2%  Economies of scale in core  Saint-Gobain CP (ES): 8.3% (3) technologies  Share price performance (LTM) (4)  Accelerated build-up of Emerging Markets  Sika: +34.1%  Acquisitions to strengthen market access,  SMI: +14.8% technology, economies of scale  Saint-Gobain : +2.9%  Company values with entrepreneurial  spirit, high employee loyalty and lean Valuation multiples (2015E EV / EBITDA) (5) structure  Sika: 9.4x  De-centralized business set-up  Saint-Gobain : 6.5x  P&L responsibility by country  Standard & Poor’s Credit Rating  Reduced complexity   Sika: A- Limited co-operations  Saint-Gobain: BBB Source : Company filings, Capital IQ Notes : (1) In reporting currencies; (2) in CHF on like-for-like basis; (3) Business income margin as defined by Saint-Gobain, (4) Based on unaffected share prices as at Dec 5, 2014; (5) EV defined as market capitalization plus net financial debt, unfunded pensions and minorities, less equity investments; Saint-Gobain CP (ES) = Saint Gobain Construction Products Exterior Solutions 18

DEAL IMPAIRS SUCCESS OF SIKA   Increased complexity: numerous “at arm’s length” contracts envisaged in all countries with dual presence  Each transaction needs to fully comply with transfer pricing rules  Significant implementation and ongoing monitoring effort and cost  Protection of business secrets, incl. formulations   Various conflicts of interest on all levels  Direct competitors in mortars  Allocation of synergies  Balance sheet management   Successful practice of keeping majority of board members independent set to change   Distraction from focus on profitable growth  Absorption of management resources  Allocation of synergies and dis-synergies  Risk of paralyzing organization Significant downside risk for Sika and its public shareholders 19