The Sika growth model is synonymous with long-term success and profitable growth. By targeting the six pillars of market penetration, innovation, operational efficiency, acquisitions, strong corporate values, and sustainability, Sika plans to grow by 6-8% a year up to 2023. At the same time, it is aiming for a higher EBIT margin of 15-18%, instead of today’s 14-16%.?
Sika’s Growth Strategy 2023
With its newly defined sustainability targets for the reduction of energy and water consumption, as well as waste, Sika will be minimizing its need for resources and the environmental impacts of the production process. Sika’s overriding goal is to reduce CO2 emissions per ton sold by 12% by 2023.
One strategic pillar of the new Strategy 2023 is an increase in market penetration. In addition to the establishment of the eighth Target Market – “Building Finishing” – the focus will be above all on the intensification of key project management, the further development of distribution channels, and an expansion of the product portfolio and its distribution in emerging markets.
By 2023 the company aims to generate 25% of sales with products that have been launched on the market in the last five years. Innovation at Sika is always determined by the needs of customers. These needs feed into both fundamental and applied research. Furthermore, the company has committed itself to ensuring that every new product must offer a higher performance as well as additional sustainability benefits. Already today, Sika offers its clients a broad spectrum of environmentally friendly product technologies.
To a significant extent, the improvement in margins will be achieved through operational efficiency. Projects in the areas of operations, logistics, procurement, and product formulation should result in an annual improvement in operating expenses equivalent to 0.5% of sales.
Acquisitions are an important element of Sika’s growth strategy, enabling the company to enhance its core business with complementary technologies, improved market access, or expanded distribution channels. The focused approach allows Sika to establish the acquired businesses as platforms for additional growth.
Sika’s strong corporate culture lays the foundation for its success. Customer First, Courage for Innovation, Sustainability & Integrity, Empowerment & Respect, and Manage for Results – these are the values that drive business activity and are put into action by employees every single day, all around the globe.
Various initiatives contribute to the achievement of the strategic targets:
To expand the supply chain in growth markets, new plants, and acquisitions drive growth and margins. Since 2015 Sika's market presence has been strengthened by 11 new national subsidiaries, 44 new factories and 25 acquisitions.
Investments in R&D
Investments in R&D lead to the launch of a large number of new products in all target markets every year. Sika spends approximately 3% of sales on R&D annually.
Globally Organized Procurement
Globally organized procurement coordinates purchasing in all regions, resulting in more price efficient sourcing.
Focus on Pricing
Focus on pricing with global pricing tools and monthly pricing reporting.
Transparent Performance Management
Transparent performance management focused on well-defined KPIs.
Strict Cost Management
Fast efficiency measures in countries which are not growing.
Sales growth of 6-8% generates higher margins, as costs increase at a disproportionately lower rate.