Earnings call transcript: Sika AG Q1 2026 sees revenue decline, stock jumps

Sika AG reported a 7.1% year-over-year decline in Q1 2026 revenue, reaching CHF 2.49 billion, down from CHF 2.68 billion in Q1 2025. Despite the revenue drop, the company’s stock surged by 8.56% to 11.7 CHF, following the announcement. The market reacted positively, likely due to Sika’s strategic innovations and strong regional performance in Europe and Southeast Asia.

Key Takeaways

• Sika AG’s Q1 2026 revenue fell 7.1% year-over-year to CHF 2.49 billion.
• Organic growth in local currencies was 0.9%, despite adverse foreign exchange impacts.
• Stock price increased by 8.56% following the earnings release.
• Strong performance in EMEA and Southeast Asia offset declines in other regions.
• Continued investment in innovation and digital transformation.

Company Performance

Sika AG’s performance in Q1 2026 was mixed, with a notable revenue decline in reported currency terms but modest organic growth in local currencies. The company faced significant foreign exchange headwinds, particularly in the Asia Pacific and Americas regions. However, strong local currency growth in Europe and Southeast Asia helped mitigate these challenges.

Financial Highlights

• Revenue: CHF 2.49 billion, down 7.1% year-over-year
• Local currency growth: 0.9% year-over-year
• Organic revenue growth: -0.2% sequential improvement
• Foreign exchange impact: -7.9%

Outlook & Guidance

Sika AG forecasts an EPS of 9.3 USD for FY2026 and 10.48 USD for FY2027. Revenue projections are set at USD 14.25 billion for FY2026 and USD 15.06 billion for FY2027. The company expects M&A activities to contribute approximately 1.5% to revenue growth in 2026.

Executive Commentary

Sika’s management emphasized the company’s resilience in navigating foreign exchange challenges and highlighted the strategic focus on innovation and operational efficiency. The Fast Forward program’s implementation has already shown significant progress, with cost savings and EBITDA contributions expected to increase throughout the year.

Risks and Challenges

• Foreign exchange volatility remains a significant risk, impacting revenue conversion.
• Input cost pressures, particularly related to oil price movements, could affect margins.
• Geopolitical tensions may disrupt supply chains, although Sika has demonstrated agility in managing such challenges.
• Market conditions in China remain muted, posing a risk to regional growth.

Q&A

During the earnings call, analysts queried the impact of foreign exchange on future results and the company’s strategy for mitigating input cost pressures. Sika’s management reassured investors of their proactive pricing measures and supply chain flexibility to address these concerns.

Full transcript - Sika AG (0Z4C) Q1 2026:

Dominik Slappnig, Moderator/IR, Sika: Good afternoon, everyone, and thank you for joining our Q1 2026 revenue call. Before I hand over to Thomas, a couple of housekeeping points. This is a 30-minute call. We have prepared remarks followed by Q&A. To give as many of you as possible the chance to ask questions, please limit yourself to one question each. We will do our best to get to as many as we can. Thomas, over to you.

Alessandro Foletti, Analyst, Octavian6: Thank you, Dominik. Also welcome all from my side, and thanks for joining our call. The first quarter, as you know, is typically the smallest one of the year. For the first quarter, Sika delivered revenues of CHF 2.49 billion versus CHF 2.68 billion last year. In local currencies, our business delivered around 1% growth, and we gained market share, outperformed across all regions. Our Q1 performance was in line with our full-year revenue guidance. We continue to expect global market conditions to be muted this year with a low single-digit percentage decline of our underlying markets and a gradual improvement in momentum as the year progresses. Our local currency growth in Q1 was driven by EMEA, which delivered 3.6% growth. In Europe, we saw improved momentum through the quarter in every European country.

In the Middle Eastern region, the strong growth we saw in January and February cooled in March after the events impacting the region started. Our customers in the region continue to operate and are focused on delivering their projects as you would expect in this dynamic region. Following the events in the Middle East, we are very proud of the way that we have been able to support our customers in that region by reorienting our supply chain at tremendous speed to continue to serve them reliably. For all our customers, the number one priority is availability. We have been proactively securing capacity and ensured flexible routing. We have rapidly developed alternative input sourcing, and we monitor and help our suppliers through this time.

These actions serve to deepen our relationship with critical customers globally and leading us to gain share from others that are unable to draw on the benefits of such an agile global manufacturing and sourcing footprint. In the Americas, we saw a continuation of a weaker trend from the fourth quarter as we expected and saw local currency revenues down around 1%. In North America, as was the case in the fourth quarter, we saw strong growth from activities serving data centers but saw the subdued trends from the fourth quarter remaining across the rest of the commercial and residential market. Infrastructure activities remained solid in the U.S. Latin America delivered good local currency growth in the quarter. In Asia Pacific, we saw an improved local currency performance versus the fourth quarter. In local currency, revenues fell just over 2% year-over-year.

Outside of China, our performance improved versus the fourth quarter of last year, with most countries showing a better operating performance. Asia Pacific, excluding China, construction was up by 5% in Q1, with notable strength in India and Southeast Asia. China developed according to our expectation, with distribution still being strongly negative, also due to our rebasing of the business. But also seeing positive growth in our automotive and industry business. As we progress through the year, we face notably easier year-on-year comps in China. In Q1 ’26 was an important quarter for the future direction of Sika, given it was the first full quarter of the implementation of our Fast Forward initiatives. We have made strong progress towards our delivery of the 150 to 200 million of EBITDA contribution and the 60 million of savings to be delivered this year.

Across our markets, customers are more willing to embrace innovation. For example, fast bridge repair systems that enable our customer to do the job in days instead of weeks, or our move towards bio-based raw materials such as bio-based epoxies, gives us alternatives that are less exposed to oil price movements. This is a natural hedge that did not exist a few years ago. Our customers are also excited by alternatives to petrochemical products, and that’s also a big benefit that we are seeing under the circumstances now. Now I hand over to Adrian, that will walk you through some further details of the first quarter.

Adrian, CFO/Financial Officer, Sika: Well, thank you, Thomas. Indeed, yes, in Q1, we delivered revenues of CHF 2.49 billion, which represents a modest growth in local currency, while at the same time foreign exchange had a very strongly adverse impact. Specifically, in local currencies, our revenues grew 0.9% year-over-year in the first quarter, with Europe delivering a solid 3.6% growth year-over-year. Overall, our organic revenue growth was -0.2%, so a small decrease in Q1, but a sequential improvement quarter-over-quarter. For EMEA, organic growth in Q1 was 1.5%, with Europe seeing a strong March across the board. Overall, this was a similar performance versus the fourth quarter in 2025. The Americas fell 1.2% organically in Q1, which was slightly lower than in Q4.

APAC, as heard, organic revenue declined to -2.3% in the first quarter, but a clear improvement versus the 2023 outcome for the region, and also in the fourth quarter. As Thomas highlighted, excluding China, organic growth was a good 5.2%, driven by Southeast Asia, by India, but also our Automotive and Industry business. For the region as a whole, the biggest impact had, again, in line with our expectations, a continued negative development of the China Distribution business. However, the share of China in the first quarter is always seasonally low, hence the lower impact. China will have a more normal impact in the coming quarters. For the second quarter onwards, China is typically close to 1/2 of regional revenues. In the first quarter, it was closer to 1/3. Turning to external growth here on the M&A side.

M&A added 1.1% to our revenue growth for the first quarter, driven by the closed transactions in quarter four 2025 and at the beginning of Q1, all in EMEA. So far are expected to add about 1.5% growth for 2026 as a whole, which assumes the closure of Akkim in the third quarter. We also continue to run here a very robust pipeline. Foreign exchange was the primary driver of the 7% year-on-year decline in revenues in Q1, with a -7.9% adverse impact on the currency side. This was most pronounced in Asia Pacific, where the foreign exchange drag was -10.5%, and also in the Americas, where foreign exchange caused a -10% revenue headwind, largely driven by the weak U.S. dollar and weak Asian currencies.

Based on today’s rates, foreign exchange headwind for the year is expected to moderate somewhat to approximately -3% to -4%, due to the strong previous year declines from Q2 onwards. Our call today is mostly to discuss our revenue performance, but I also wanted to help you understand how business deals with input cost inflation. That has been a theme over the past few weeks, clearly given the Middle East situation. As a company, our input costs have a dependency on supply and demand and some correlation with the oil price, but it is not direct. We buy further down the value chain, so the link to crude oil is diluted and comes through with a certain lag. The lag means the impact of recent input cost moves will be seen later in Q2.

However, and this is important, we’re acting preemptively with pricing and other measures and have moved rapidly to protect margins, drawing on our experience from previous inflationary periods, also being quicker as we do these increases. Also, if we pass through the full absolute input cost increase of our raw materials, this could still have a mechanical, mathematical negative impact on our material margin in % net sales, depending on the magnitude. As you have seen historically, we have managed our margins well, also through new and higher value-added solutions, leveraging procurement scale and the ability to diversify our input base. As heard through our Fast Forward program and through additional MBCC synergies, this will alleviate much of the pressure on the Group EBITDA level.

Fast Forward will deliver CHF 80 million of incremental benefits in 2026, and we are on track to deliver CHF 30 million-CHF 40 million of additional MBCC synergies for the year. Now with this, I turn back to you, Thomas, for a few final remarks.

Alessandro Foletti, Analyst, Octavian6: Okay. Thank you, Adrian. Maybe here, coming back with any of these geopolitical developments, we monitor the potential knock-on effects closely. At this stage, the direct impact on our business has been limited. Our team’s ability to rapidly reorient supply chains to serve customer has been exceptional and exemplifies Sika’s strengths. We have preemptively addressed expected supply chain costs with pricing to protect our best-in-class margin, and we continue to leverage the CHF 280 million we invest annually in R&D to drive industry-leading innovation and returns for our customer. This is when our customer deepen their partnership and rely increasingly on us to solve their problem. When supply chains are disrupted, when customers need availability and reliability, our ability to shift resources across regions and serve them when regional competitors cannot is helping us to achieve market share gains and growing trust with our global customer.

We are seeing this play out right now. The current environment highlights the Sika uniqueness, and we intend to build on this. Through Fast Forward, we have invested in improving productivity, which will deliver CHF 80 million of saving this year. We are accelerating our investment in product innovation and improving our customer value proposition. Our digital transformation and investment across distribution channels will accelerate our future industry outperformance profitably, by giving our customer best-in-class solutions efficiently. Our outlook for the year is unchanged. We confirm our full-year guidance of 1%-4% in local currency sales growth, and an EBITDA margin range of 19.5%-20%. We continue to expect global market conditions to remain muted in 2026, and remain watchful of the unfolding events in the Middle East.

We continue to expect a softer first half for the global construction industry, and gradually improving momentum as the year progresses. Q1 was a constructive start, but we remain vigilant and agile to react to market conditions. Back to you, Dominik.

Dominik Slappnig, Moderator/IR, Sika: Thank you, Thomas. With this, we open our Q&A. As a reminder, this will be a short call. To give all of you the possibility to ask questions, please limit yourselves to one question each. Thank you very much.

Alessandro Foletti, Analyst, Octavian2: We will now begin the Question and Answer session. Anyone who has a question may press star and 1 on their telephone. You will hear a tone to confirm that you have entered in the queue. If you wish to remove yourself from the question queue, you may press star and 2. Questioner on the phone, I request to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Anyone who has a question may press star and 1 at this time. The first question comes from the line of Ben Rada Martin from Goldman Sachs. Please go ahead.

Ben Rada Martin, Analyst, Goldman Sachs: Great. Thanks very much for the time this afternoon, Thomas, Adrian, and Dominik. My question was on the 2026 guidance. I know at the start of the year, we were talking about a broadly flat pricing and inflation backdrop. That’s obviously changed a whole lot in the last month and a half. What is your updated expectations in terms of pricing contribution and inflation from raw mats as we sit today? I understand that the situation continues to evolve, but just in light of the reiteration of guidance, it might be helpful just to speak about what kind of contribution you see at the moment. Thank you.

Alessandro Foletti, Analyst, Octavian6: Okay. Thanks for the question. It is too early to really quantify for the full year the impact as we have seen here almost daily, weekly changes in the direction. We see punctual limitations and especially on transportation. So far, our approach is clearly we are putting all those elements that are increasing our input costs into proactive pricing measures. So far from the magnitude, as I outlined also for the Q1, it is rather limited. It might increase in the coming quarters, but the magnitude will very much depend on the evolution that we are going to see, and the evolution is, at this point, unpredictable. We see limitations, but at the same time, to draw now already, let’s say, an absolute contribution for the full year is premature.

Ben Rada Martin, Analyst, Goldman Sachs: Okay. Thank you.

Alessandro Foletti, Analyst, Octavian2: The next question comes from the line of Ephrem Ravi from Citigroup. Please go ahead.

Ephrem Ravi, Analyst, Citigroup: Thanks for the opportunity for the question. Related to the pricing on the cost side, given different dynamics in the petrochemical chain, are there any materials where you’re facing, in particular, a pricing increase or in fact, kind of just pure supply shortage, given kind of just the different refining and processing capacities in the Middle East? Thank you.

Alessandro Foletti, Analyst, Octavian6: Yeah. There are nuances in certain commodities. Let’s say the polyethylene streams are very much, let’s say, challenged, the epoxies as well. It is not across the board. It is more also to the supply chain setup. Some of these feedstock are coming out of crackers in Asia, which have difficulties to get their input material, and the input materials are at higher cost. There, this is when we refer to supply chain rerouting and our mitigation means compared to local players or regional players. We can then also tap into availabilities of other regions to support. This comes then at a higher cost, which we then also transform into our product pricing.

as mentioned before, especially in the Middle East. Construction is ongoing, and the biggest concerns of our customer is that they would have to stop activities on the sites because of unavailability of products. Therefore, it’s rather our discussion centered around give them the confidence that we are a reliable source, and we can help them to maintain the operations going. This is very different from other parts of the world.

Alessandro Foletti, Analyst, Octavian8: Thank you.

Alessandro Foletti, Analyst, Octavian2: The next question comes from the line of Ibrahim Omami from CIC. Please go ahead.

Alessandro Foletti, Analyst, Octavian0: Hello. Thank you for taking my question. Could you give us maybe more details on the Fast Forward cost reduction plan impact of CHF 80 million between H1 and H2? It is a balance between H1 and H2, or the costs are more maybe back-end loaded? Thank you.

Alessandro Foletti, Analyst, Octavian6: Yeah. Thank you for this question. I think on Fast Forward, as mentioned, we’re making very good progress in terms of also impact on the P&L. In terms of execution, we’re even, let’s say, further advanced. We’re currently running, if you take this CHF 80 million at sort of around a 70% run rate. This is going to increase here over the course of the year. We had some early effects last year in Q4. The expectation is second half is higher, but continuing to ramp up from here.

Alessandro Foletti, Analyst, Octavian0: Thank you very much.

Alessandro Foletti, Analyst, Octavian2: The next question comes from the line of Martin Flueckiger from Kepler Cheuvreux. Please go ahead.

Alessandro Foletti, Analyst, Octavian1: Yeah, good afternoon, all. Just a quick one on business conditions in the U.S. If I look at the Architecture Billings Index, still slightly below 50, but it’s starting to show encouraging signs. I was just wondering whether you can reconcile that, what kind of feedback you’re getting on the ground, particularly with direct sales in terms of the sentiment across the U.S., not only in residential, but also in commercial and infrastructure, please?

Alessandro Foletti, Analyst, Octavian6: Yeah. The start of the year in the U.S. as well as in parts of Europe were also impacted by some more severe weather conditions. We have seen that March was then kind of trying to catch up as much as possible from that. The momentum going into Q2 was really also a bit in this catch-up mode. The underlying, let’s say, sentiment, especially on the commercial side, hasn’t changed that significantly. The positive sentiment around, let’s say, the data centers absolutely is continuing. We have here excellent momentum. Also, the infrastructure is moving very nicely in the right direction, but the other parts haven’t that much changed. Even so, we have seen a bit of a catch-up lately, but that’s more of the delayed activities that then were executed in the past few weeks and also going into April.

I think it’s premature to say this is now a fundamental change.

Alessandro Foletti, Analyst, Octavian1: Great. Thanks.

Alessandro Foletti, Analyst, Octavian2: The next question comes from the line of Elodie Rall from JP Morgan. Please go ahead.

Elodie Rall, Analyst, JP Morgan: Thanks. Sorry to come back on pricing. Could you tell us what kind of price increases you’ve already announced, what has been already announced, and maybe that you see realized? You said that this will have an impact on margin lagging. How much impact do you expect at first, and when will you recover the gross margin of 54%-55%? Thank you.

Alessandro Foletti, Analyst, Octavian6: Okay. Here, of course, the situation is very different from region to region, even country to country. What you can say in general, we have seen that transportation costs have gone up. The famous or infamous fuel surcharges are almost everywhere applicable, but they are also, let’s say, in the magnitude, not, let’s say that big. You have some, like in the Middle East, with the, let’s say, rerouting and with the higher costs, you have a more significant contribution there. The affected Middle East countries are only 4% of the Sika Group revenue. Also this, we have to be a bit, let’s say, calm in relativating this and not make the one thing applicable to everything.

Here there might and will be slightly more pricing visible going forward, but this can also change any time when things are changing in the Middle East, when the Strait of Hormuz is opening up, when oil price comes down or goes up. Here it’s just really at this point too premature to make here already a forecast for the full year. It might be slightly higher than what we have indicated at the beginning of the year. We talked about that at full extent. That’s probably to be expected, but the magnitude, I would just be very cautious to model in something. We are not in a situation like after COVID. After COVID, we had demands going through the roof and supply chain collapsing. We don’t have that demand situation now. We are rather in muted market conditions. Yes, we do have limitations.

We have restrictions, but it is not the same pricing momentum that we have seen post-COVID.

Alessandro Foletti, Analyst, Octavian2: The next question comes from the line of Pujarini Ghosh from Bernstein. Please go ahead.

Alessandro Foletti, Analyst, Octavian4: Hi, thanks for taking my questions. Coming back to your guidance for 2026, given that when you gave the guidance initially, we didn’t have this war situation, standing here, almost two months later, what do you expect the impact of the war to have been on your local currency growth guidance as well as the margin guidance?

Alessandro Foletti, Analyst, Octavian6: Okay, thanks for the question, and I really want to reiterate also here that we started the year with a cautious guidance. We talked, to that extent, the +1%-+4% in local currency is also anticipating eventual, for the full year, muted market conditions with negative growth rates, but it could also change over the year, and we still expect also some momentum there as signals, especially also in big markets like Europe, are indicating some improvements. At the same time, we also, on the margin side, we have been cautious giving a range that we feel comfortable and not even the first, let’s say, unexpected move is already jeopardizing our guidance. At this point in time, we want to be very clear that our initial guidance, we don’t see any reasons why we would change our top-line guidance nor our profitability guidance.

As also Adrian has outlined, the things that we have in our control, I mean, pricing is in our control, our supply chain is in our control, but also, of course, it’s in our control to deal then with market opportunities going in both directions. So here, I think we have a lot that we can still bring. We have the Fast Forward, that’s a purely organic contribution. The remaining synergies of the MBCC. This gives us the confidence that we can reconfirm our guidance as articulated in the middle of February.

Alessandro Foletti, Analyst, Octavian4: Thank you.

Alessandro Foletti, Analyst, Octavian2: The next question comes from the line of Cedar Ekblom from Morgan Stanley. Please go ahead.

Cedar Ekblom, Analyst, Morgan Stanley: Thanks very much. Hi, Adrian. I just wanted to follow up on how your customers are responding to price announcements. Have you seen any pre-buying from any of your customers? If a customer was thinking of pre-buying, what kind of time frames are we thinking about that they might want to have a little bit more stock? Does your product category sort of last a while? Can you put it in stock for six months or nine months, or is it really a case of your customers buying for immediate consumption? It’d be helpful to hear how customers are responding to the likelihood of future price hikes. Thanks.

Alessandro Foletti, Analyst, Octavian6: Thank you, Cedar, and it’s clear, these are discussions which customers don’t like that much because it’s putting their cost up. Our argumentation and our clear also commitment, we transfer what we incur from the input side, from transportation side. We are very transparent, and these discussions very soon center around availability because customers still keep in mind that’s how it started after COVID, and then it turns from a pricing into an availability dilemma. We see that customers have this still in their minds. I think this, of course, it is always a delicate conversation, but, I think we learned a lot that we have to go earlier, and we have the right ammunition to explain, but at the same time, we are also firm on installing those price increases. They are, of course, tuned for each customer individually, in each country individually.

Our products don’t offer that much of a pre-buy opportunity. We are not talking here about months or so. You can maybe pre-buy for a week, two weeks, maybe three weeks maximum. We are also watching this as we don’t want that, let’s say we get into this hamster situation where the early movers then empty our warehouse. We are balancing, we are looking at the forecast. We also look at new customers that want to buy from us and see how we can serve them. It’s a balancing act that we are executing, and I think it’s also well understood in the market that we are reliable and that we have also resources available.

To maintain availability to them when others fall short. This is super relevant.

Alessandro Foletti, Analyst, Octavian2: The next question comes from the line of Yassine Touahri from On Field Investment Research. Please go ahead.

Alessandro Foletti, Analyst, Octavian7: Thank you very much for taking my question. Just one question. I think when I look at the period when you had a big increase in oil price, like in 2011, 2018 or 2022, your gross margin temporarily fell below the 54% of your target. If we assume that oil price remain elevated, could we see again a scenario where your gross margin end up a little bit below the 54%? Knowing that if we can see what happened in the previous years, after it was recovered afterward, when oil prices fell down. It would be good to get a sense of how to think about the gross margin range in an environment where oil price could remain high for a long period of time.

Adrian, CFO/Financial Officer, Sika: Yeah. Thanks for that question. I think again, to really sort of give a definitive answer as to where we’ll be landing in terms of, let’s say, the input cost movements is difficult to say from today’s perspective. I think we have to think in scenarios, and of course there is scenarios where we can, let’s say, fall below that range. On the other hand, there is also clearly some which will keep us in there. Maybe secondly, I think this is also important here in the overall context. I mean, the 54%-55% is not sort of a hard target. It’s really very strongly a steering mechanism. If you look at sort of EBITDA margins which we manage from a starting point before one-time costs last year to 19.2%.

We have these elements which are very much under our control in terms of the Fast Forward impact, 60-70 basis points of improvement, the MBCC incremental synergies, another 20-30 basis points. Of course here the swing factor is operating leverage, which is also here related to pricing, which, clearly given the environment is skewed towards the upside. You have the input cost side, which in connection with, let’s say, the price increases, we will pass through in order to protect absolute margins, depending on the magnitude, obviously can have a mathematical effect on material margins. I think, yes, it is possible, but clearly we’re managing here the whole P&L and the respective elements, particularly here, pricing versus input cost, too early to really clearly pinpoint.

Alessandro Foletti, Analyst, Octavian7: Thank you very much.

Alessandro Foletti, Analyst, Octavian2: The next question comes from the line of Berenberg from Jefferies. Please go ahead.

Berenberg, Analyst, Jefferies: Hi, afternoon. Thanks for taking my question. I just had a question on Auto. You obviously called this out in Asia-Pacific as being a positive influence. I just wanted to check if it had a tangible impact in EMEA or Americas. Thanks.

Adrian, CFO/Financial Officer, Sika: Here on the automotive and the industry business. Yes, I think the automotive one obviously is clearly related also to build rates and the ability of us to continue to increase content, which we have actually been able to in all the regions. Here, also in the other regions, we have here increased sales more strongly than car build rate performance sort of across the board. Also the industry business in most of the key countries and the regions has been quite solid overall a bit stronger than construction growth across the regions.

Berenberg, Analyst, Jefferies: Thank you.

Alessandro Foletti, Analyst, Octavian2: The next question comes from the line of Remo Rosenau from Helvetische Bank. Please go ahead.

Alessandro Foletti, Analyst, Octavian5: Yes. Hi. Thank you. In the fourth quarter, you mentioned the negative impact in the Americas from the government shutdown. Have you seen some catch-up effects already in the first quarter due to that? We should expect them sooner or later, right? Or should we rather expect those to come in in the later quarters?

Adrian, CFO/Financial Officer, Sika: Good point, Remo, and very clear. This catch up is something that takes time as this release is not done in a week or in a month. We have seen that this backlog of approvals has been worked through in Q1, which will also then probably become more visible and pronounced in Q2. This effect has been, let’s say

Alessandro Foletti, Analyst, Octavian6: Phased out from the administrative point of view, but now it’s of course, then in the pipeline of projects for execution.

Adrian, CFO/Financial Officer, Sika: Bottom line, that means that you didn’t see that much of a catch-up already in Q1?

Alessandro Foletti, Analyst, Octavian6: That’s correct, yeah. We didn’t see that much of a catch-up. Q1 is also a bit difficult to read. We had very bad weather conditions in North America, particularly in the East, which is a very strong region. Here, it’s not so clearly visible to say how much of what has contributed. Going forward, I expect here to see a bit stronger input from that.

Alessandro Foletti, Analyst, Octavian5: Okay, thank you.

Alessandro Foletti, Analyst, Octavian2: The next question comes from the line of Alessandro Foletti from Octavian. Please go ahead.

Alessandro Foletti, Analyst, Octavian: Yes, good afternoon. Thank you for taking my question. On Asia Pacific, you mentioned, Adrian, that maybe in Q1, the negative impact from China was below average. In previous call, you also said that the closing of your distribution points of sale might end at the end of H1. I was wondering, if I look in the next three quarters, is it fair to assume maybe a bit of a more negative organic growth in Q2, but then going back maybe above Q1 and maybe even in positive in Q3 and Q4?

Adrian, CFO/Financial Officer, Sika: Yeah. Well, thanks, Alessandro. Here, maybe to sort of reframe a bit what I said here, I was particularly referencing, let’s say, the weight of, let’s say, China as a percentage of Asia Pacific sales, which is clearly lower in Q1, hence having a sort of a disproportionate impact on overall sales trajectory, which by the way, outside of China, as outlined was quite solid with 5%. On China specifically, overall, we have seen in spite of, let’s say, or next to the lower weight, a certain improvement compared to Q4. Q2 will have, let’s say, more weight of China. Yes, we’re not expecting a further improvement, maybe, a more negative impact on Asia Pacific. But also given the comps, but particularly also the activities we’re driving, and it’s less, let’s say, closing of year point of sales.

Here, the expansion will continue to progress with more focus on, let’s say, the refurbishment part with, let’s say, sort of the quality of the program. Yes, all in all, we’re expecting here a better relative performance in China in the second half year.

Alessandro Foletti, Analyst, Octavian: All right. Thanks.

Alessandro Foletti, Analyst, Octavian2: The next question comes from the line of Patrick Rafaisz from UBS. Please go ahead.

Alessandro Foletti, Analyst, Octavian3: Thanks, and good afternoon, everybody. A quick follow-up on pricing. I think, Adrian, you talked about the potential for a mathematical dilution of the margin from price increases ahead, but you also said you are implementing the price increases preemptively with input cost inflation probably hitting you more towards the end of Q2. Does that mean that we should anticipate a degree of windfall profits in the second quarter?

Adrian, CFO/Financial Officer, Sika: Yeah, thanks. Patrick here, of course. Well, firstly, it continues to be quite a moving target in terms of impact. Thomas talked about, let’s say, sort of the immediate impact on the transportation cost side. I think here we have also been very immediate on the pricing, particularly the preemptive was clearly focused on our reaction in terms of obviously announcing it. There is typically still a certain lag in some cases to actually get it implemented. I would not here count on, as you call it, windfall profits, but we’re trying to be as much aligned here with the actual cost as possible, and I think that’s clearly quicker than in, let’s say, previous situations.

Alessandro Foletti, Analyst, Octavian3: Okay, understood. Thank you.

Alessandro Foletti, Analyst, Octavian2: The next question comes from the line of Arnaud Lehmann from Bank of America. Please go ahead.

Arnaud Lehmann, Analyst, Bank of America: Thank you very much. Good afternoon. Arnaud Lehmann. I have two questions, if I may. The first one is a follow-up on your cost outlook. In terms of your own raw materials, have you been able to secure everything you need for the next few months, for the second quarter? Do you have visibility on your cost base for Q2? That’s the first question. The second question is related to your recently announced acquisition of Akkim in Turkey. Do you have an idea on the closing of the deal, and is it included in your full-year sales guidance? Thank you very much.

Alessandro Foletti, Analyst, Octavian6: Thank you. We wanted to have one question only, but I think the Akkim question is one that is of general interest anyhow, so I start with that one, and I do kind of reconfirm what we already mentioned in February. Yes, we are on track to close the transaction in Q3, and we have included in our top-line guidance one quarter of contribution from that, which is half a % net sales growth. That’s unchanged. We are advancing with that process as planned. On your first question, I think on that side, we do have visibility for roughly one and a half to two months on the cost side. What Adrian mentioned before is that we are kind of integrating the visibility in our preemptive pricing measures. It is kind of going in parallel.

As we progress in Q2, and we have not yet the full visibility for the full quarter, but we have pretty good visibility, which we then also utilize to adjust our pricing in line with that. We don’t know yet where the prices or the input cost situation will be, let’s say, middle of May, end of May, which still has an impact for Q2. At this point of time, I think we have availability and also transparency for a good part of Q2.

Arnaud Lehmann, Analyst, Bank of America: Thank you very much.

Alessandro Foletti, Analyst, Octavian2: The next question comes from the line of Harry Dow from Rothschild & Co. Please go ahead.

Harry Dow, Analyst, Rothschild & Co: Yeah, thank you. Good afternoon. Just one question really on the step-up in activity in March in Europe that you mentioned, I wonder if you could sort of pull out some of the strongest growth by country in Europe and whether those trends have continued through to April to today? Thank you.

Alessandro Foletti, Analyst, Octavian6: Yes, we have seen. We talked in February about, let’s say, a good momentum in Eastern Europe, which has been building up over the whole year in 2025, and it has continued, and we also have seen this to further contribute. We also have talked about the Nordics, so the Scandinavian countries, but also about the U.K. Our business in the U.K. has further progressed, mainly because of our activities in the market, our integration of the last few acquisitions, the synergies we have there. We talked about that, but in the meantime also, we talked about, let’s say, the Iberian Peninsula, as well as parts of Southern Europe. In the meantime, also Germany and France are signaling a progression in the Q1.

Now it’s to be seen how much of that is going to further accelerate or is it just at this level, but good overall, let’s say, traction that is building out.

Alessandro Foletti, Analyst, Octavian2: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Dominik Slappnig for any closing remarks.

Alessandro Foletti, Analyst, Octavian6: Thank you very much. This brings us to the end of our Q1 discussion. Thank you for joining our call and speak to you soon, the latest for our Q2 conference call. Thank you, and bye-bye.

Alessandro Foletti, Analyst, Octavian2: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your line. Goodbye.

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