Media Conference March 2nd, Ernst Bärtschi, CEO. Outlook 2010 / 2011

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1 Media Conference March 2nd, 2010 Ernst Bärtschi, CEO Outlook 2010 / 2011

2 First 3 Anecdotes from 2009 In order to have real time reaction in the market and uniform communication, we decided to have Friday Letters starting in March 2009 and ending in October events. and the anecdotes! 1. Announcement of delayed and potentially lower bonus payments 2. Easter 2009: Explanation about values and dignity of human beings to be considered in redundancies 3. Announcement about discontinuation of Friday Letters in October 2

3 Market Position Selected Market Position Improvements 2004 ranking 2009 ranking Concrete Biggest competitor: BASF Roofing Biggest competitor: Firestone Waterproofing Biggest competitor: Grace Flooring Biggest competitor: RPM Automotive Biggest competitor: Henkel

4 Economic Expectations Europe: USA: Latin America: IMEA: Unstable, aftershocks probable 21 states at the brink of bankruptcy Stable to good with few exceptions (Venezuela) Good with few exceptions (Turkey) Asia Pacific: OECD countries stable, China and others good 4

5 Market Positions: Expected Trends Concrete: Contractors / Distribution: Industry: - The big players will be more dominant in a growing market - Innovation in new technologies will drive the global sustainability trends. - New markets and higher penetration in emerging markets will add new business opportunities - Training of new applicators in emerging markets will be of highest importance - Moves to Asia / IMEA - Big players will be more dominant 5

6 Global Megatrends in Sustainability Megatrend 1 The demand for limited resources is increasing Sika solutions - Admixtures for quality concrete made with recycled aggregates - Admixtures for on-site recycling of excavated material - Grinding aids for energy-efficient cement production - Special sealant for argon-filled insulating glass - Bonding technology for energy-efficient and lighter windows 6

7 Global Trends in Sustainability Megatrend 2 The climate is changing faster than ever before Sika solutions - Structural adhesives - Reinforcers - Adhesives for the solar industry - Solar roofs - Highly reflective liquid and sheet roofing membranes - Adhesives for the development of long-lasting wind turbines - Protection against the elements - Admixture technology a strong foundation for wind energy 7

8 Global Trends in Sustainability Megatrend 3 Water is in increasingly short supply Sika solution - Admixtures and mortars for watertight concrete - Joint sealing for waterproof structures - Internal coatings for the storage of potable water - Membranes systems - Mortars for concrete repair - Coatings for surface protection - Resins for crack repair sealing - Admixtures for reduced water consumption for concrete 8

9 Global Trends in Sustainability Megatrend 4 The need for efficient infrastructure is rising Sika solutions - Construction chemicals - Technical equipment - Waterproofing membranes - Composite systems for durable infrastructure - Membranes for cool roofs in hot climates - Membranes for green roofs for better urban climates 9

10 Global Trends 2010/11 - Emerging markets will continue to grow - Construction activities have unstable developments in particular in USA and Europe. Aftershocks may influence the business. Distribution continues to be stable - Automotive will grow moderately in Europe and stronger in emerging markets - Raw material prices show tendency to grow - Limited capacity to pass cost increases on to customers - Foreign exchange rate fluctuations may influence the business - Innovation will drive the sustainability opportunities - Increased opportunities for acquisitions 10

11 Trends Europe 2010/11 1. Construction activities stabilize on low level in particular in markets with massive declines over the last 2 to 3 years (Spain, UK, Eastern Europe, etc.) 2. Sika will increase market shares, however with moderate growth rates 3. Pricing will remain difficult in particular in areas with massive overcapacities such as membranes 4. Cash collection will become more difficult 5. Assuming there will be no aftershocks, results will be slightly improved at best 11

12 Trends Americas 2010/11 1. Construction activities US at best continue on low level, Latin America will show heterogeneous developments with Brazil in the lead for growth 2. Automotive and Industry will only slightly grow 3. Sika will increase market shares with moderate growth rates 4. Cash collection will become more difficult 5. Assuming there will be no aftershocks, results will improve 12

13 Trends India Middle East Africa (IMEA) 2010/11 1. Construction activities in India, Abu Dhabi and some African countries will grow, others will be flat 2. Sika will continue to increase market shares 3. Cash collection will remain difficult 4. Assuming there will be no aftershocks, results will improve 13

14 Trends Asia Pacific 2010/11 1. Construction activities in China will grow. OECD countries will have a low recovery only all others have good growth prospects 2. Automotive and Industry are on low level and have growth potentials 3. Sika will continue to increase market shares with moderate growth rates 4. Assuming there will be no aftershocks, results will improve moderately 14

15 Other developments 1. The Fit 4 Future strategy will show good effects in 2011 onwards if no aftershocks disturb the development - refocus in technologies and products - refocus in markets - adapt organization and processes (push and pull, supply chain, training, HR) 2. European Supply Chain Optimizations will show more effects 3. New talents will find opportunities in new business areas, new business opportunities may attract new talents 4. Sika will celebrate it s 100 years in a strong position with a good future 15

16 Summary 1. Economic situation unstable in various areas of the world: Aftershocks cannot be excluded 2. Sika demonstrated in 2009 agility and will continue to: Take advantage of market potentials Expand sustainability solutions Adapt structures in case of aftershocks Grow market shares with focused growth strategy 16