Nucor earnings beat by $0.08, revenue fell short of estimates
Investing.com -- Sika AG (SIX:SIKA) shares fell more than 2% on Tuesday after the company lowered its full-year 2025 sales growth forecast, citing ongoing weakness in China and foreign exchange headwinds, while maintaining its profit margin target.
The Swiss construction chemicals firm now expects a “modest sales increase in local currencies,” down from its previous forecast of 3% to 6%.
The revision implies second-half growth of 0.4% to 2.4%, compared with 1.6% in the first half and 1.3% in the second quarter. Company-compiled consensus had expected 4.0% growth in the second half.
Second-quarter revenue declined 5.9% year-over-year to CHF 3 billion. Like-for-like growth was 0.3%, while a 7.2% foreign exchange headwind weighed on results.
The figure came in 0.8% below consensus. For the first half, revenue was affected by a 4.3% currency impact.
In EMEA, Q2 sales fell 2.3% to CHF 1.32 billion, with like-for-like growth of 2.3%, 107 basis points above expectations.
Sales rose in the Middle East and Africa, and Sika noted early signs of recovery in Eastern Europe.
The Americas posted Q2 sales of CHF 1.05 billion, down 8.1%. Like-for-like growth was 0.4%, in line with consensus.
Growth in Latin America continued, while North America was impacted by uncertainty surrounding trade policy.
Asia-Pacific revenue declined 9.4% to CHF 625 million, with like-for-like sales down 3.7%, falling short of expectations by 250 basis points.
Sika cited continued challenges in the Chinese residential market. Growth was reported in Vietnam, Indonesia and India, supported by public infrastructure and automotive demand.
First-half EBITDA fell 2% to CHF 1.07 billion, 1.8% below consensus. The EBITDA margin rose 13 basis points year-over-year to 18.9%, but was 19 basis points short of expectations. Net profit dropped 3.9% to CHF 554 million, missing forecasts by 3.5%.
Operating free cash flow fell to CHF 181.9 million from CHF 401.3 million a year earlier, reflecting higher net working capital, currency effects and an 18% year-over-year increase in capital expenditures. Capex rose to 3.3% of sales from 2.7%.
Material margin held at 55.1%, unchanged year-over-year and 50 basis points above consensus.
Sika reported flat input costs. Personnel expenses rose to 19.3% of sales from 18.8% in the prior-year period, while other operating expenses declined to 16.9% from 17.6%.
The company reaffirmed its full-year EBITDA margin guidance of 19.5% to 19.8%, in line with consensus of 19.7%.
Synergy expectations from the MBCC acquisition were raised to CHF 160 million to CHF 180 million for 2025, from a previous range of CHF 140 million to CHF 160 million.