Sika Raises Sales Target as Demand in Latin America, Asia Climbs
Sika AG (SIK), the world’s largest maker of construction chemicals, raised its full-year sales target as shipments accelerated, led by growth in Latin American and Asia, sending its shares up the most in three months.
Sika expects revenue growth in local currencies of as much as 7 percent in 2013, up from an earlier forecast for as much as 6 percent. Sales grew 11 percent in local currencies in the third quarter to 1.4 billion Swiss francs ($1.6 billion), beating the 1.38 billion average estimate of analysts surveyed by Bloomberg.
“Sika continues to execute for the long term by investing a large portion of its cash into its supply chain and distribution,” said Patrick Laager, an analyst at Credit Suisse AG in Zurich. “Management is also systematically adding external growth through smart acquisitions,” he said, adding that there is “scope for small upgrades” to earnings estimates.
Sika has accelerated an expansion of factories across Latin America and other emerging markets to boost sales under Chief Executive Jan Jenisch, who took over in January 2012. The Baar, Switzerland-based company, which completed the purchase of a building adhesives business from Akzo Nobel NV (AKZA) for 260 million euros ($357 million) on Oct. 1, may continue to pursue acquisitions in the fourth quarter and next year, Laager said.
Sika shares rose as much as 5.8 percent, the steepest intraday increase since July 29, and were up 5.6 percent at 9:07 a.m. in Zurich, giving the manufacturer a market value of 7.1 billion francs.
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