Sika Beats Consensus as Sales Outlook Lifts Despite Swiss Franc Impact

Sika, a Swiss construction-chemicals maker, has raised its full-year sales outlook despite a stronger Swiss franc impacting reported revenue. The company's first-half sales slipped 1.5% to 5.59 billion Swiss francs, but in local currencies, sales grew 4%, beating the consensus of 5.44 billion Swiss francs.

CEO Thomas Hasler credited market-share gains in a muted construction backdrop for the outperformance, which helped lift Sika's full-year local-currency sales-growth range to 3%-6% from 1%-4%. However, the company trimmed its full-year EBITDA margin view to 19%-19.5% from 19.5%-20%, indicating that some of the extra revenue will come with higher costs.

The update may be seen as a mixed bag for markets, as the higher sales range paired with a lower margin range points to weaker operating leverage. Analysts can raise their sales lines in models without needing to lift full-year EBITDA much, which may lead the market to judge the update less by the headline sales beat and more by whether Swiss-franc profits can hold up if currency strength persists.