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Investing.com -- Sika reported a weaker-than-expected third quarter, with organic sales declining for the first time in years as a slowdown in China weighed on results.
The Swiss construction chemicals group posted third-quarter sales of 2.9 billion Swiss francs, down 5.8% year-on-year and about 1% below consensus cited by Jefferies.
Organic sales fell 1.2%, compared with expectations for flat growth, while the Americas and EMEA divisions held up better than Asia-Pacific, where sales dropped 8.2%.
EBITDA came in at 574 million francs, around 1.5% below consensus, with margins broadly flat year-on-year near 19.8%.
Sika shares edged slightly lower in early trading.
Jefferies analysts led by Priyal Woolf said the profit shortfall was mainly due to the weaker top line and estimated that “stripping out around CHF 15 million of one-off costs would imply an EBITDA margin above 20%, helped by an 80-basis-point improvement in gross margin.”
For the first nine months of 2025, Sika’s sales fell 3.8% to 8.58 billion Swiss francs ($10.82 billion), though local-currency sales rose 1.1%. EBITDA for the period declined 3.3% to 1.64 billion francs, just below expectations of 1.65 billion.
The company said it will implement structural changes in weaker markets, including China, cutting up to 1,500 jobs as part of a cost-saving program.
Sika expects one-off charges of 80–100 million francs in 2025 tied to the restructuring, alongside 120–150 million francs in investments under a broader efficiency plan aimed at generating 150–200 million francs in annual savings by 2028.
Jefferies analysts said that excluding these costs, “the upper end of the adjusted margin guidance of 19.5–19.8% is still doable.”
The group maintained its 2025 sales outlook for a “modest increase” in local currency terms and cut its reported margin forecast to about 19% after restructuring charges.
It also rebased its medium-term growth target to 3–6% per year through 2028, from 6–9% previously, while keeping its goal for margins above 20% from 2026.
Jefferies said the early rebasing “should help re-establish credibility in guidance and may indicate an earlier earnings downgrade trough, though investors are likely to wait for clearer signs of delivery.”