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Sika Drops Sales Growth Target on Weaker Europe Building Outlook

Feb. 28 (Bloomberg) -- Sika AG, the world’s largest maker of construction chemicals, said it’s unlikely to reach a medium-term sales growth target of as much as 10 percent as Europe’s debt woes weigh on the region’s builders.

The maker of Sikaflex sealant is now predicting 4 percent to 6 percent growth amid a “continuing uncertain situation” in Europe, it said today. Sales increased 5.8 percent to 4.8 billion francs ($5.2 billion) in 2012, the Baar, Switzerland-based company said today, in line with analysts’ estimates.

The company is ramping up activity in South America from Brazil to Argentina to offset a construction slump in Europe, which accounted for about half of the company’s revenue in 2011.

“Management is adopting a somewhat less upbeat tone when guiding for medium term growth,” Patrick Laager, an analyst at Credit Suisse in Zurich said in a note to clients. “We also believe that Sika may opt for more external growth opportunities.”

Sika confirmed targets for earnings before interest taxes, amortization and depreciation and for net income.

To contact the reporter on this story: Patrick Winters in Zurich at pwinters3@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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