Good afternoon, everyone, and thank you for joining. Our nine months call today will last 60 minutes with an opportunity for Q&A after the presentation.

To give as many of you as possible the chance to ask question, please limit yourself to one question each. With this said, Thomas, over to you.

Thank you, Dominik, and also from my side, thanks for joining our nine months call, and I'm very happy to report on the progression of the business since the last time we have met. Here, just on the general overview which you also have seen in the short video stream, we have been able to accelerate our local currency growth up to 4.8% over the first nine months, which is a further enhancement and acceleration from the six months starting point.

Also on the total revenue, we reached 8.7 billion in sales. This, Adrian will then further explain, also the split with the currency and the evolution as as we go forward.

Here, very clearly, also a very strong testimonial of our outperformance of still muted and challenged markets. Nothing changed since our mid-year touchpoint.

The markets are still very much driven by uncertainty, ongoing uncertainty as we speak. Then, I think the the material margin, when we look a bit deeper than sales, has further still expanded, 40 basis points above prior year, a clear indication also of our activities in regards to pricing and offsetting inflationary elements, but also here I refer then further to Adrian to give us details.

The EBITDA margin, as also shown in the in the short clip, 19.2%, a further increase from the last year by 1.9%. Net profit, again, 1.9% improvement.

Overall, when you look at this set of achievements, very clearly outperforming the market, outperforming through very selective, decisive initiatives, looking where markets are giving us opportunities and capturing those opportunities, capturing based on our value contribution towards our customer activities, demonstrating also in tough times that Sika is the best source for them to be more successful in their challenging environment. When you look how the sales contribution has built up over the three regions, then let me start with the largest region, with EMEA, that has 8.3% local currency growth contributing to the group, the strongest contribution in there as well.

We have acquisitions, but a very strong organic growth as well. In EMEA, we have seen the Middle East doing very strong despite a very challenging environment.

Strong double-digit growth continued also in Q3, and is also from a from a perspective what we expect in the near future. As we have demonstrated in the Middle East to all this ongoing large infrastructure projects, we are the most reliable source.

We bring not only the value through our systems and products, but also our supply chain doesn't disrupt any activities, even if it comes at a higher cost with more complexity. Sika is the partner to stand by our customers in the Middle East that have a very challenging environment, but they keep moving on the big projects, on the airports that we showed last time, activities are going there at high velocity, and we are the partner of choice for our customer in the Middle East.

Also other parts of EMEA are doing well. Africa, a strong contributor, a regular, strong contributor in high single-digit growth momentum.

Also in Europe, we have a differentiation in Europe where the eastern part of Europe clearly demonstrate a growth momentum, where other parts also a little bit weather-related, the hot summer months were particularly more influential in the central and in the southern part of Europe. At the same time, in in September, this has been recovered, and we also see challenged markets like Germany showing growth momentum, and here, for the first time, we can also see that incremental funds are flowing into the the infrastructure renovation.

It's still on a low level, but it's a good sign that finally, let's say, through the process of allocating funds, that these funds now find the way into the market, and we expect also that this is then going to further pick up over time as more and more funds then go into execution. Europe clearly still the most challenged market, but also here, pockets of growth, green sprouts that we are working on, and data centers as everywhere around the globe, very much an area where we are capturing more gains and where we are demonstrating also our ability to support large projects, a large investment project with more and more solutions that are contributing to the overall build of those data centers or in large projects where customers, but also specifiers and engineering company can rely on more solutions from us.

When we look into the Americas, the Americas has grown 4.1%, and I think the momentum in the Americas, as this is mainly organic growth, here we have a very strong acceleration in in Q3, above 6% in in Q3, a very reconfirming direction as we also indicated at the mid-year point. In the Americas, and here I have to start with the US and I have to start with the data center momentum, which has further accelerated.

It is going at a high velocity, and we are capturing here also a lion's share of the opportunities that are given to us or ahead of us. The same time, our business in in Canada, but also in in Latin America, has good momentum and giving us also the confidence that the Americas will further evolve on on the path as we have indicated again at the mid-year point.

Then we move to Asia-Pacific, and Asia-Pacific, and here I would just start with with the China contribution, which still is very visible in the overall contribution. It's a -2.3% as the rebasing of our business, construction business in China, and especially also the the residential-oriented business has still a very significant impact.

The market hasn't solidified yet. The residential market has not stopped to deteriorate and is still in a strong double-digit decline, but our measures are showing that we are countering that, especially on the bottom line, the profitability, the securing of our profitability is our clear target for our Chinese business.

Our Chinese business is healthy, is profitable, double-digit profitable, but the market still gives us, in one of the three sectors, still a a strong declining base that we are proactive acting on as part of the Fast Forward, but also with the with the given momentum. The other initiatives in in the Fast Forward related to China are starting to to show that we are here capturing with focus on renovation, with the focus on on large domestic commercial manufacturers, especially manufacturing in food and beverage, but in in other industries as well.

With our solutions for those players that are gaming up towards the international competition, they also see clearly the value of us helping them to have their infrastructure, their assets at the at the international level, and we gain share there. We also see that the renovation requirements in China in general are increasing.

In line with our expectation, our business evolves on that direct China construction business, and then ultimately also the automotive and industrial activities. Even so, the market is challenged, we are outperforming the market quite substantially and increase content.

Let me also now talk about Asia-Pacific excluding the the China contribution, and here we have a significant organic growth, an organic growth similar what we have seen in in in the Americas and also in in other parts of the world. Here, it is clearly a strong contributor to our business in overall.

Outperformance is the name of the game. It is clearly what what drives us.

We want to be the prime partner to our customer, and we are the prime partner to our customer. This is then demonstrated also how we outperform our peers.

This chart. It's the charts that we are putting together every then and now when we have reported numbers from our peers.

Here, more significantly, when you when you look on the right-hand side, when we exclude the China influence, which is mainly an influence that that is also based on our activities in China, we are in in China as China is a key market, but most of our competitors are not in there, the peers are not active in China, and then you see the outperformance has further built in momentum in the last six months, and we also expect that this outperformance is going to further be pronounced going forward. One topic, I think, for those of you that have joined us also a few weeks back at the investor event in Duedingen, the acquisition pipeline, the bolt-on transaction that we have done at the beginning of the year in Sweden, a bolt-on mortar manufacturer, giving us an exciting opportunity to expand not only in Sweden, but also in the adjacent countries in Denmark, in Norway, in in Finland.

It is only six months since Finja is part of our family, but we see very good momentum in accelerating the growth of both of Finja and of our Sika business, and also the reception from customers is reconfirming our assumptions that we put into this transaction. A very a very interesting and very decisive for the Nordic acquisition.

Akchim, we mentioned at the investor event in Duedingen. It's a sizable, it's a 220 million company that we closed one month ago with a very strong start into this integration, and it is an acquisition primarily focused on sealants, adhesives, foams that we can accelerate as a growth platform within Sika, and you will see later on our aspiration is to double the sales of the 220 million in the next five year with the with the integration of Akchim into the Sika family.

Just recently, we have closed in the UK, Aspext. It's a it's a smaller transaction than Akchim, but it is again it's one of these bolt-ons that allows us to enter more significantly into an adjacent landscaping market, which is very much connected with our construction business.

It is enabling us to take advantage of this very profitable, very fast-growing opportunity first in the UK, and then also later on become available for scaling in other parts of Europe. Then also, I want to mention, even so it's not a nine-months-relevant transaction, but we just announced it a few days back, the signing of the Resonac adhesives business that we buy out of the Resonac Chemical Group in in Japan.

It will still take some time until we we close. We expect by mid of next year.

Again, here, it's an adhesives company active especially on the automotive and the tiers of the automotive industry in Japan, in China, as well as in in Taiwan. Akchim, as I mentioned, the the the top-line, let's say, expectation, the opportunity we have with Akchim to double the business through their network, through our network, it is well on track to to to deliver according to this scale showing here.

At the same time, I would just like to remind our bolt-on strategy, to acquire companies at the lower multiple, bring it up to us, our multiple, and of course, use them as accelerator of our growth, organic growth strategy, MBCC as a reminder, moving from 15% EBITDA to 20% EBITDA within a very short period of time, and then all the bolt-ons for for various contributions, very much in line with this accretive deployment of capital to enhance and and accelerate our organic growth momentum. I would like to come back to Fast Forward.

A year ago, pretty much a year ago, we we initiated Fast Forward and gave you especially clarity on the structural side. We talked a lot about our Fast Forward structural saving initiative.

It came with a one-off cost of 108 million, but it also came with an expected saving of 80 to 110 million over the years, and here we are very well on track, and the initiatives taken and also the the the rebasing of our China business, construction business is all well on track. In Duedingen, four weeks ago, we talked a bit more about the investment into growth.

As the one thing is shaping the business towards the the reality that the markets are representing, especially here China, but at the same time, investing into growth at the same moment when there's a challenging time, investing through the cycle is is is an investment into growth, into future growth. Here, at that time, we talked about 120 to 150 million of investments, and also here, then a significant return to be expected.

We shared that in in in Duedingen a couple of weeks back, but I would like to reiterate some of that here now again, what, where and where are the investments going and how are we going then also to benefit of those investments. On one part is customer value, creating ease of operating with us through the B2B e-shop, but the EPS, EPDs that are becoming even more relevant in doing business across the globe, digital sales support, enabling our sales team to to be more with the customer, more in the field, having on the tip of their fingers all the the answers that they need to provide to the customer, and then as part of that, also building up AI-based customer journeys to enhance and bring tangible value to the customer by helping our customer to be more efficient in in in their value creation from project prospecting into tendering, into planning, into execution.

Very tangible customer value on that side. In the middle, our own supply chain, the ease of doing business with Sika, also investments here into having end-to-end supply chain capability, digital factory to to drive internal efficiency, but also to to be closer to the customer, and put systems like TMS and end-to-end systems in place that again makes it easier for the customer, but also easier for us to bring the products at the right time, in the right quantity, to the right place.

Then the third element, and that's the the acceleration of the innovation journey by utilizing also here AI platforms to gather all the knowledge, all the the the learnings from every day's experiments and make that available to our 1,800 chemists with an AI-supported tool here. As you as we call it Nuage, and here every day we feed this this machine more and more information, which means these datas then become more and more valuable, and these are overall also elements that make us very confident that this, let's say, future digital, data-driven competitive advantage requires that you have the datas, and us as the largest player in the industry, with having access to all core markets, we can leverage this know-how like nobody else, and we believe strongly that this digital leadership is going to be a key differentiator going forward as the world moves more digital also in construction.

A year ago, I I or not a year ago, sorry, last time, I showed you a stadium as it was the football season. This time, I would close my introduction by showing you another topic.

We love data centers. We are on it.

Data centers consume a lot of energy. We see a wave ahead of us of energy sources, and not only renewable, but also hydro, nuclear, all kinds of energy sources are going to be, according to the different geographies, being built in in the coming years.

Again, energy provider, energy projects are large-scale infrastructure projects perfectly fitted for for Sika. We are deep, deep into this infrastructure builds.

We have all the elements that are vital for creating and bundling our solution, and here I brought this this dam, the Diamer-Bhasha Dam in Pakistan. It's under construction, and here you can also see that the this dam consumes all our solution, from the concrete admixtures, anchoring grouts, coatings, waterproofing, everything that Sika contributes is on such a project.

Again, a fantastic example of sizable infrastructure projects that are going to become much more vital. When you when you focus on the right-hand side of the picture, then you see that there's an expected 15% CAGR expected in in the years ahead of us in just in regards to hydropower energy contribution to the overall energy mix.

Here, I think we are going to talk more about energy going forward as this is clearly also not only driven by the the digitalization drive and the data centers, but also the consumption and the move towards more electrical power. Here, I think a highlight that I just wanted to share you like the stadiums before, a prime example of Sika's strengths to benefit from global trends.

With that, I would then hand over to Adrian to talk a bit about the financials.

Very good. Yep, thank you, Thomas, for highlighting here our quite successful business execution.

I will now like to focus and give a bit more insights on the financials of the first nine months. In the nine months to end of September, Sika delivered very solid revenue growth, as we have heard.

Let me now walk you through some of here the key elements in looking at the nine months sales bridge. Driven by another solid quarter in Q3, organic growth was 3.5% in the first nine months, with acquisitions adding a further 1.3% of growth.

This is slightly above the first half year, taking Sika overall to 4.8% growth in local currencies. As Thomas had highlighted, our growth in every region, with the exception of China, was strong.

Here, you can clearly see this. Without the decline of the China construction business of around 127 million in the first nine months, we delivered actually 6.2% of local currency growth.

This is up from 5.5% in the first half year. Organic growth ex-China was actually 4.9% for the period under review.

Overall, a very strong performance in what still is a subdued market, and I think clearly showing that our strategies are delivering. In terms of Swiss francs turnover, we delivered 8.71 billion in sales in the first nine months.

This is up from 8.58 billion in the same period of last year. The adverse foreign exchange trajectory reversed in Q3, reducing nine-month negative foreign exchange impact to -3.2%, as in the isolated Q3, the foreign exchange effect was actually positive, positively contributing 1.5% in the quarter.

Looking forward, of course, at today's foreign exchange rates, we expect here a full-year impact of foreign exchange to be between -2% and -3% for the whole year from today's point of view. If we look at here the growth development or the sales development on a sequential basis, we have clearly shown here a reversal of the trend in the first half and have further improved in Q3.

As mentioned, organic sales growth at 3.5% for the first nine months, in isolation 4.6% in the quarter, this being up from 2.9% in the first half year. Pricing has played a part in our growth after the start of the conflict in the Middle East, but we also delivered about 1% volume growth in the first nine months, gaining further market share, and in spite of a negative China.

Contribution from acquisitions in the quarter 1.5%, slightly above here of the first half year. This is due to one month of contribution of Akchim already, which we closed at the beginning of September.

Given Akchim, you should expect about a 2.5% acquisition contribution in the fourth quarter. Let's now look at the full P&L and move down here from the sales line.

In the first nine months, we delivered a further expansion here of the material margin, going up to 55.4%. This is up 40 basis points compared to the same period of last year, which reflects procurement scale, efficiency, as well as pricing amid increasing input cost, and it also includes higher cost pass-through of strongly increasing transportation cost that do sit in the OpEx line, but passing this on through pricing or surcharges.

Dilution from acquisitions was relatively minor here on gross result level, about 10 basis points. In looking at personnel expenses, personnel expenses actually declined modestly, as our Fast Forward initiative compensated underlying wage inflation, and also the addition of M&A-related headcount.

Other operating expenses, on the other hand, with an increase of 5.5%, largely due to a significant higher transportation cost, reflecting both an increase in cost of diesel and the impact of driver shortages in parts of the world, but, as mentioned, with this corresponding pass-through on the top or material margin line. As a result, EBITDA came in at 1.676 billion, an increase of 1.9%, and a flat EBITDA margin of 19.2%, including also here a 10 basis points foreign exchange drag.

Our EBIT margin at 14.5% was up 10 basis points, or 2.3% versus last year, on marginally higher depreciation and amortization cost. Net profit came in at 888 million, up 1.9% on last year, and more than 10% of sales.

Correspondingly, diluted EPS also increased from 5.42 to 5.52 per share in the previous year. Now let's look a bit closer in terms of the individual buckets here driving EBITDA development in looking at the EBITDA bridge and the various elements, delivering this 10 basis point increase in EBITDA margin on constant currency basis.

On a reported basis, as mentioned, stable EBITDA margin of 19.2%. Clearly, on the one hand, continued improvement of our organic material margin by 50 basis points and cost savings and benefits through Fast Forward were the two elements here offsetting some of the cost increases, as mentioned, largely related to a significant increase in transportation cost, also including in last year a couple of positive one-timers in the previous year, but, as mentioned, this being pass-through on the top or the material margin line in terms of increased cost.

As you can see, Fast Forward is delivering. At our recent investor day, I presented an update on Fast Forward.

Also Thomas mentioned it before. Here a brief recap: we're clearly on track here to deliver the 80 million of productivity benefits in 2026.

This will rise to about 110 million of savings then through 2027. Now at this point, at the end of the nine months, we are run-rating on a monthly basis close to 8 million of savings per month.

Here the last two buckets on M&A, also a solid continued revenue capture relating to MBCC, driving here 20 basis points of margin contribution in the first nine months. This brings basically the trailing 12 months impact in terms of absolute synergies compared to the period before closing to above 200 million, here within the guided and targeted range for 2026.

Acquisitions closed this year had a minor dilution impact, on the one hand integration cost, on the other hand also PPA effects playing a role here. Lastly, excluding here the 10 basis points foreign exchange headwinds, this 10 basis points improvement of EBITDA margin is underlying here a solid material margin management, as well as execution here and delivery on Fast Forward and on M&A synergy capture.

With this, I'll hand back to you, Thomas, for the outlook.

Okay. Thank you, Adrian.

Here on the outlook, most important or most relevant, we reiterate our outlook from end of July with the 3% to 6% growth in local currency, as well as our EBITDA expectation, 19% to 19.5%, and confirm our consensus at that time. We have reflected, and as you remember, in the mid-year time, the Q3 is more visible than the Q4, and this is still the same.

Q4 has a lot of uncertainty in there, and therefore we also confirm what we have reiterated and guided you at the mid-year point. With that, I would then say thank you and hand over back to you, Dominik, to then open the channel for question.

Thank you, Thomas. Then we are now ready to take your questions.

If you would like to ask a question, simply go to the Q&A tab and follow the instructions. The first question now, and we have already a list here, goes to Vitush from Baader Helvea.

Please ask your question.

Hi. Good afternoon.

Thanks for taking my question. Just regarding the outlook.

If we take the midpoint of the guidance, it seems like the fourth quarter of 2026 should clearly slow down. I think you will need something around, sir, 3.5%, 3.7% of growth in the last quarter of 2026 in terms of growth in local currency.

To meet the midpoint, and can you give us also a bit of color on what potentially would lead to such deceleration in organic growth for the last quarter of the year, please?

Here I come back to our discussion we had already on that in July. Q4 is a weak quarter in general.

It has influences, let's say, natural-driven influences. Weather condition can turn Q4, as well as Q1, quite a bit.

We also have then, let's say, man-made influences that we also highlighted in July. We have the midterms coming around.

We have still instability in the Middle East. We have the oil price that just recently has reached another peak.

The instability is still very much prevalent. In a quarter like Q4, those influences have a higher impact than, let's say, in the strong Q2 and Q3 quarter where the industry is very, very active.

Therefore, deviations from those elements can have a bigger impact than in the other quarters. Then we indicated these are the things that we cannot control, we cannot predict.

Already in July, it was highlighted that this may be a bit conservative. I agree, it is a bit a conservative view that we have in our guidance, but that hasn't changed.

We don't see, let's say, elements in Q4 that are kind of drifting in the one or the other direction. Therefore, we have confirmed our mid-year guidance.

Thank you.

Thank you, Vitush. Next question goes to Ben Radnor from Goldman Sachs.

Excellent. Thanks very much, Thomas, Adrian, and Dominik for the questions today.

My question was just on pricing. It's been very good to see that you've been able to manage the inflationary pressure in the business year-to-date.

Thomas, you made a comment just then that those pressures are getting a little bit more difficult into the end of the year. I know some of the other building materials peers are starting to talk about 2027 pricing, and additional actions you may have to take.

Are you in a position to kind of share some of your views on additional pricing that you may take into 2027 to protect margins, just to give us a working assumption on, I guess, how you're thinking about the contribution from price into the coming year next year? Thanks.

Good. Thank you, Ben.

I think here it's very important to say we have a very proactive pricing approach. We're not looking into next year, make a guess.

We're looking how the cost side is evolving and how this is going to impact, eventually, us in the near future. Our scouting and our global supply chain gives us the input material, let's say, evolution for the next 10 to 12 weeks, which immediately translates into then local, depending on the impact it has on the local lineup of products, to mandate then that the local organization takes initiatives to offset those cost so that, in line with the cost coming in, that also our pricing is offsetting.

I think here we have done a very good job in the last eight months or nine months, or eight months since we had the disruption in the Middle East. This is just about exactly how we are also going forward with this indications on the input cost.

The transportation cost is also something which is very volatile, and here, again, there's a clear mandate for the local organization, depending on the dependency of the transportation exposure, the diesel, the shortage of drivers, here also to act proactively and included into the pricing. Our pricing modus is country by country different, depending on the needs, and therefore it can be on a monthly-based price adjustment, it can be adjustments that are done on a six to eight weeks, on a three months.

That's really very diverse, but the same principles are applied across the globe. Here, again, the power we have with data, the power from our supply chain also to provide this, and then also a very strong sales force that is close to the customer, and bringing to the customer news that customers in general don't like so much, but also with clarity what is behind, how it is, and then, of course, also stressing we bring value to you, we have also ideas how you can mitigate.

Maybe the product price goes up, but let's then also invest into systems where you need less labor, where you can take total cost out of the system, is the overwhelming driver also for our customer to accept, but also engage into further enhancing our product offering, giving them relief. I call this the painkiller for our customers.

You have to imagine that our customers, they have huge challenges as they can hardly offset all the cost increases, the labor, and so on. They need smart solutions, and that's why, in times like this, for us, it's a mandate to help to create value for our customer with a total cost to view.

At the same time, of course, also safeguard that we are not allowing here a lag in the cost transition.

Very helpful. Thank you.

Thank you, Ben. Next question goes to Ephrem Ravi from Citibank.

Thank you. One for Adrian, perhaps.

Just on the transportation cost, it looks like for the nine months you had roughly a 16 million increase in transportation cost. Can you give us a sense as to the total kind of cost base on a full-year basis so that we can sort of get a percentage?

Is there any way you can hedge or control that cost, or is it all just down to pricing in terms of how you can kind of mitigate the impact? Thank you.

Thanks, Ephrem. Here on the impact of the first nine months, if this, let's say, had started the very beginning of the year, you would be right with the number you have stated.

Obviously, this has started here in March, but that's about sort of the monthly evolution you had highlighted. It's very difficult to hedge this.

Obviously, this is a service we procure. You have obviously elements of tendering and sort of optimizing, but that's, in the end, at least here in the shorter term, which you have to accept and, let's say, find ways to mitigate it.

Obviously, as a part of the pricing packages, one thing, but then also trying to optimize across here the supply chain. That is the current situation, obviously, which we're managing very closely, also with, let's say, different effects and magnitudes by country.

Thank you.

Thank you, Ephrem. Next question goes to Priyal Woolf from Jefferies.

Hi, everyone. It's Priyal Woolf here from Jefferies.

I just had a follow-up on the outlook and the implied sort of Q4 slow down you talked about. I appreciate that Q4 can have an outsized sort of impact, but I guess I just wanted to check, is there anything tangible that you're seeing already which would underpin that sort of slow down going into Q4, whether that's October trading, we sort of talked about potential volatility around the midterms, order books, general feedback from customers?

Or should our interpretation be that just holistically looking at the world, things are still sort of going okay, but we need to bear in mind it could deteriorate suddenly? Thank you.

Thank you, Priyal, and happy to go a little bit deeper. Our controllable momentum makes us very confident.

The momentum that we have achieved over the first nine months, this I have no doubts. This is delivering, and this outperformance is delivering.

To the other side, I don't have yet really, let's say, a growing concern in one or the other direction. The midterms which are ahead of us, I have seen my own experience quite some impacts that that can be fallouts of that, and North America is an important market.

I don't have anything that concerns and troubles me more than maybe three or four months ago. I'm just cautious that I don't go fall into the trap that I read too much into the market which we don't control, and rather say our momentum, I can absolutely reconfirm, is robust delivering, our initiatives are delivering.

I don't want to take the crystal ball and read something that then at the end is maybe not materializing.

Thank you.

Thank you, Priyal. Next question goes to Zaim Beekawa from J.P.

Morgan.

Afternoon. Thanks for taking my questions.

Just one on the Americas. Obviously, like-for-like was really good in Q2 and Q3, and I appreciate there's some potential midterm impact in Q4, but given the data center growth, how sustainable do you think this could be into '27?

Will this be a region where we see potentially the strongest growth next year? Thank you very much.

Good. Thank you.

I have to also break here a bit the lance for Asia-Pacific. Asia-Pacific, excluding the China business, has grown organically 7.7%, a significant growth in parts of Asia, in India, in Southeast Asia.

I don't want to take the limelight away from Asia just because we have the rebasing in China. You're right, North America had an acceleration from Q1, Q2, Q3, and data centers are playing here an important role, but also our infrastructure business, our large commercial business, especially those incremental construction related to batteries, semiconductors, and so forth are for us growth engines.

The expectation going into next year is that we also see here a good momentum data centers. We don't foresee that '27 is going to be a dip.

We have no indications. We look at the order books.

The order books are still very, very full and also looking further out. We all understand also that can change, but so far, we don't see a change, and therefore data centers remain a high priority not only in North America, but the speed of data center acceleration also is more and more visible in Europe, in Asia, and we are on it, and we also want to build on those opportunities in the near future.

Great. Thank you.

Thank you, Zaim. Next question goes to Cedar Ekblom from Morgan Stanley.

Thanks very much. Hi, everyone.

I wanted to go to the Asia-Pac business. We're getting into a period where we're lapping much easier comps from an organic growth perspective, and yet the business is still delivering a negative organic growth.

How do we think about the organic growth for Asia-Pac in the fourth quarter and in the first quarter? Are we still going to be in negative territory, or is there potential that with those easy comps now in the base and the right-sizing of the China footprint having played out, that we should actually see maybe not positive, but at least breakeven organic growth in Asia-Pac in Q4 and in Q1?

Thank you.

Thank you, Cedar. I think in our guidance for Q4, which is a reconfirmation of our guidance of the mid-year, we have of course also China in there, and we don't break out individual countries or segments.

It's also correct that the rebasing in China, which started in Q3, has still, let's say, some sell-off of products that we have deprioritized in the second half of this year. It is not a cutover where, with the decision, everything has been, let's say, gone.

It had to also to be depleted into the market. We didn't destroy materials that we did not prioritize going forward.

This is also an effect that needs to be considered, and is also in our consideration integrated. At the same time, the residential market being still with a 25% minus, similar to last year, not coming to a normalization.

It is speculative when there will be eventually a deceleration. We expect next year still to be significantly negative.

What we are doing is adapting to this reality, not just waiting, not being in here in November and then say, "Oh, what are we doing?" We have constantly adapted our approach in China, seeing also that there is no slowdown in this deceleration of the activities.

Therefore, more activities have been deployed into the renovation part in the residential, as well as in the direct business, and therefore also then steering the organization and the structure more towards the areas where we see that there are signs that we can build on, and renovation being one, but also on the residential side. China overall has a very negative momentum, but markets, big markets like Shanghai, Shenzhen, they have a bit a better momentum, and therefore also for us, we are shifting, as we see the market shift.

For us, the priority is also to safeguard our profitability in China, which is solid, which is double-digit, which is for us a key not to fall into the trap of many others to go for volume. We go for quality.

We go for the renovation. We go for the cities that have a better prospect, and this all together, we expect also then, over time, to deliver and then also become more visible to you and the outside.

If Q2 Q4 or Q1, we will give you then more insights when we are at that point.

I'm not sure I understand the answer, Thomas. I get the puts and takes, but are we negative in APAC still?

I don't really know where that all shakes out. Strength in some areas, weaknesses in others.

I don't really know when we think about Asia-Pac as a whole turning neutral or even positive. Is it a case that you don't have the visibility?

I just don't know how to take puts, takes, etc. I would have expected Asia-Pac to be turning positive by now after the downsizing, because we're sort of more than 12 months post the downsizing now, unless I've misunderstood the timeframe.

Cedar, if I start to go into the projection for China, the next one is, how is then the US? How is Germany?

We are giving a guidance for the company, and we don't give a guidance on the region or individual countries, I ask for your understanding that I cannot go into that detail as it triggers many other questions as well. We're dealing with the situation in China, I think very well.

We are having the Fast Forward assisting us, but also our agile approach. We are refraining from making here statements about individual businesses or even individual quarters, and this is misleading and it is a complexity that we cannot entertain.

Understood. Thank you very much.

Thank you, Cedar. Next question for Martin Flueckiger, Kepler Cheuvreux.

Good afternoon, gentlemen. Thanks so much for taking my question.

It's on the price/cost spread for energy, raw material, and transportation costs, and I suppose it's one for Adrian. Just wondering whether you expected this price/cost spread to be slightly positive in Swiss franc terms in Q4, and what kind of impact you expect at the EBITDA margin level, because my understanding is that you need to overcompensate quite a bit to neutralize cost inflation at the margin level.

Will non-material cost inflation be again dilutive to margins in Q4? That's it from me, thanks.

Thanks, Martin. Here on, let's say, the price/cost spread, as we have also talked about and guided during mid-year, I don't see here a change for the full year.

I continue to expect here for the full year, in absolute terms, at least slightly positive here price/cost spread. I think if you look at the seasonality, typically in terms of material margin in the second half year, this is generally lower in the second half.

We also obviously have sort of a different here trajectory now with input cost increases being sort of more predominant, I'm expecting here a bit of a squeeze here towards the end of the year, but in line with the expectations in isolation Q4 versus previous year, it is likely going to be lower, as we had a different trajectory over there. On the cost side, yes, transportation will continue to have an impact, transportation cost much higher than in the previous year.

Also, this is part of the pricing element which we're managing. Overall, sort of looking towards the end of the year, I think sort of the trends we have seen rather continuing, and we're actively managing here the P&L in this regard.

Just to clarify, when you're talking about the price/cost spread, you're talking in absolute in Swiss franc terms and not in margin terms, right?

In absolute terms, because, of course, what you also have more and more, obviously, with the pricing element being more predominant, that there is an arithmetical effect on the relative material margin. Yes, I'm talking absolute price/cost spreads.

Perfect, thanks.

Thank you, Martin. Next question is for Ebrahim Homani from CIC.

Hello, do you hear me?

Sure.

Hello, Operator:

Ebrahim, probably we take you Yes,

yeah, sorry. Do you hear me,

yeah?

Thank you. I have a question on your cash generation.

How is working capital trending after the lower H1 cash flow?

Thanks for the question. In terms of cash flow, we have reported first half year where we had here about a 45 million, let's say, shortfall compared to the same period of last year.

The overall cash generation is developing according to, let's say, the normal here seasonal pattern. In the first nine months, we have maintained that similar shortfall, we're generating here, as said, cash according to the seasonal pattern.

You're right that, of course, the working capital trend in terms of the elements are somewhat different compared to last year. Obviously, with now higher material costs, meaning on a like-for-like basis, also higher inventory values, also the fact that, in some parts of the world, we need a bit more safety stock, but that is very much managed, and we continue to target and guide for a cash generation that is meeting or beating our target, the threshold of 10% of net sales.

Thank you very much.

Thank you. The next question for Isaac Touahri from Onfield.

Hi, guys. Thank you for taking my question.

The first one maybe on the pricing. It seems your pricing accelerated a bit below 4% in Q3.

Could you tell a bit what you're seeing in October, and could you see pricing reach 5% in Q4? Then next question on the margin outlook, maybe looking at '27, you seem on track to finish '26 near maybe the low end of your margin guidance, which would mean no margin improvement after we adjust for last year's one-offs restructuring costs.

Now, how do you see 2027? Could we see margins still under pressure in H1 due to the cost inflation, the high transportation costs, and a still difficult China?

Thanks for the question, and of course, this is highly speculative, what we are facing in '27. We also want to be very clear.

This pricing, as explained before, we are very agile, and we are adapting as we go. We will form an opinion on the '27 cost evolution, and then, of course, also how much pricing that will trigger on our side.

It's much too early to indicate. There can be so many elements happening between now and February when we guide 2027 that anything we say is probably wrong because we have seen in the last years how influential unknown factors can be.

Therefore, you have to be with us to understand that the '27 guidance is something that we will formulate crystal clear then in the full-year reporting in February when we then also outline how we see '27 at that point of time, but it is too premature now to make here speculative guesses.

Thanks.

Thank you for the question. The next question goes to Arnaud Lehmann from Bank of America.

Thank you very much. Good afternoon, gentlemen.

Two questions on my side. Maybe starting with a follow-up on China.

You mentioned the underlying market pressure, but how much of it is related to your own, let's say, capacity adjustments, plant closures, etc.? Are you proactively leaving some of those markets to refocus on direct sales, etc.?

That's my first question. Or is it all about the market downturn?

Secondly, you've been a bit more active with bolt-on acquisitions in the last months. Do you feel more comfortable in terms of free cash flow generation, balance sheet profile, and should we expect more of those, let's say, small and medium-sized bolt-ons going forward?

Thank you very much.

Thank you, Arnaud, and I work on the first one, and I could also on the second, but that maybe then leave to Adrian, as you ask about the capital deploy. Just to say, bolt-ons, I always said we have a rich pipeline.

Now it came all together in a few days, we're happy about that. That's not something that every week we have three announcements or so, we have a good pipeline.

The other part of the question Adrian is going to then follow up. On the China construction business, this is not where we segregate and say the market goes down and we just follow the market.

We are proactively in the direct, as well as in the indirect. Also the indirect business has a clear initiative to activate the existing work living space, the renovation part that has been in the past not a focus area.

There's a lot of square meters has been built, and that's the likelihood that there's more activities instead of buying new to renovate is absolutely a direction that we want to capture, and that is how we redeploy our sales force, how our activities, also the product offering is shifting, and renovation is a core strength of Sika construction in general. Also we are taking here, let's say, expertise from the direct business into the residential business to drive this.

We're not just watching the market. We are actively, let's say, building around the areas where we see and believe there will be more potential going forward.

Yes, we do also, of course, recognize that when volumes go down, as I indicated, still 25% less new surface has been built in China, that we, of course, also structurally are adapting to this reality. For us, on the one side, the adjustment to the market is a mandate, but the other part is also to drive then through our allocation of resources future growth that is incremental to the market.

There we see also nice progressions, where we see this renovation part becoming more relevant, and we have here a value proposition to bring into residential, as well as in the commercial construction is reconfirming our deployment or redeployment of our resources. Adrian

Building on your first comment, yes, we do have quite an active and solid pipeline. The timing, if it was that easy to always plan it exactly, this is more, obviously, a coincidence that we had, let's say, these few in a relatively short period of time.

I think, overall, we do this very strategically and sort of working market by market, really identifying areas where we can leverage growth and drive, obviously, synergies and profitability with a clear return focus. That is also here the answer for the capital deployment.

I think on the bolt-on side, we can clearly demonstrate that these are high-return transactions. After three years, we have typically reduced here the multiple we have paid by about four turns, also having very clear return on capital criteria, and this is then also, obviously, the case where we deploy in our capital, but also on the cash generation, on the leverage, I think we're moving clearly here in the direction where we can also fund those, and in combination with these return considerations, you can also expect us to continue to do here these bolt-ons that have a strong return.

Very good. Thank you very much.

Thank you. This brings us to our last question.

It goes to Alessandro Foletti from Octavian.

Thank you for taking my question. I just wonder one quick thing.

You mentioned that you had delays or lower growth because of the hot summer. As a matter of fact, I saw people going on the construction site late and going home early, and so on.

It was really hot. These projects will be concluded.

Isn't it then being transferred, for example, into Q4, the completion of those projects, or is it transferred into Q2 in 2027?

Alessandro, that's a very good question to the end. Yes, construction is very different.

When we in Europe are complaining about the temperature, in the Middle East, this is a spring condition. We are just not used to those heat waves, and construction can continue, but we are not yet used to it.

There has been a bit of a slowdown, but you are absolutely right that this slowdown is not that the business is gone, and, as I mentioned, already in September, there was a catch-up, we had not, let's say, too big impact in the quarter, but there is still a bit of a visible impact, and it will level out, absolutely. This is not lost activities, it's just it has been in July and August particularly become visible, and then September was already greatly recovering, and the rest will happen in October and November the latest.

It's nothing I want to dramatize, but it has been, especially here in Europe, a bit of a challenge.

Thank you.

This brings us to the end of our call. We take this opportunity to highlight the date of our next full-year result conference.

It will be on the 19th February 2027, and with this, we wish you a good last quarter of this year. Goodbye.

Thank you.

Thank you.