Sika Drops Sales Growth Target on Weaker Europe Building OutlookPatrick Winters
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.