Shareholders, ladies and gentlemen, I would like to welcome all of you to the Annual General Meeting of Sika AG. It is a special pleasure for me to welcome so many of you to Congress House of Zurich today. I would like to extend a particular welcome to the members of the Board of Directors and Group Management, as well as the Sika employees present today. I am also pleased to see some alumni of the Board of Directors, Vernon, Christoph, and even Paul Helg. That makes me almost nervous. For this Annual General Meeting, I decided to uphold the tradition to deliver my contributions in German, although English or French and even Flemish would be more convenient to me. Yet, with Sika in Baar and Congress House of Zurich, it is only fitting to speak German.
I hope you will bear with me if I may make the odd mistake or say something that is completely nonsensical. Now, joining me on the podium we have Thomas Hasler, our Senior CEO, Adrian Widmer, our CFO, and Stefan Mosley, Senior Counsel and Secretary to the Board of Directors. Now on site, we also have more than 20 Sika employees working in various places here. I would also like to extend a warm welcome to these hardworking helpers and thank them for their work and commitment. Safety is a top priority at Sika. Every event, internal event is opened with a safety moment. This is why I would like to begin the Annual General Meeting by giving some important safety instructions. The entire building has emergency exits that are labeled as emergency exits. You can see them here on the sides of the hall.
For example, in the unlikely event of an evacuation, I would like to ask you to use the emergency exits and leave the building by the most direct route. An emergency team recognizable by wearing high visibility waistcoats will assist you. The assembly point is on the other side of the road, directly on the lake shore. You can also see this on the map displayed on the screen. Let me move on. Setting up today's Annual General Assembly with publication in the Swiss Official Commercial Gazette on 25 February 2025 and by written notification sent on 25 February 2025. The invitation to this Annual General Meeting was sent in due form and time in accordance with the articles of association and legal provisions. The invitation contained the items on the agenda and the proposals from the Board of Directors. From February 21, 2025.
The annual report, the auditor's report and the compensation report have been available for inspection by shareholders on the website in response to the company's request. Published in the Swiss Official Commercial Gazette on 24 January 2025. No requests to add items to the agenda have been received within the published deadline. The minutes of the last Annual General Meeting was signed by the Chairman and the Secretary and it's been available for inspection by shareholders at the company's head office and was also published on the Internet in accordance with our Articles of Association. As Chairman of the Board of Directors, I shall chair this annual meeting. I appoint again Mr. Steffen Mosley to take the minutes today. In this context, I would like to point out that the annual General Meeting will be recorded on video and broadcast live on the Internet as a web stream.
The minutes of the Annual General Meeting and the presentations will be made available on our website and they will also be sent out to you on request. Let's now move on with pointing the tellers whose names you can see displayed on the screen behind me. These will only be used in the event that the electronic voting system is cancelled and we have to use the voting coupons handed out to you with the admission cards. This is Caroline Inhow and is the head of the tellers. I would like to thank the ladies and gentlemen tellers for taking on this assignment. KPMG AG, the auditors, are represented by Mr. Tony Wattenhoffer and Ms. Anna Poehler, whom I would also like to cordially welcome. Furthermore, as the independent proxy, I would like to welcome Mr. Jos Rindlin Lawrence Notes Republic at Brightlaw in Zug.
He will vote in accordance with instructions given to him by the shareholders. I would like to thank Mr. England for accepting the mandate and ask him to rise briefly. Thank you. Furthermore, shareholders must be informed at the Annual General Meeting. If the independent proxy has already informed the company of the voting instructions received prior to the Annual General Meeting, I herewith inform you that Mr. Windlein has not informed the company of the voting instructions he already received. Shareholders were also able to participate in today's Annual General Meeting by issuing proxies and instructions to the independent proxy electronically. Electronic participation and any changes to electronically submitted instructions were possible until Sunday, 23 March 2025, 11:59 P.M. As in previous years, shareholders had the opportunity to sign on via an online platform to submit questions to the Annual General Meeting.
However, no such requests have been received via the platform. In this context, I would like to point out once more that shareholders attending the Annual General Meeting via the web stream can exercise their shareholder rights either via the independent proxy or by granting a proxy to a third party prior to today's Annual General Meeting.
It.
is not possible to exercise shareholder rights via the online platform. Finally, I'd like to take this opportunity to thank Mr. Dominik Slappnig and his team for organizing the event today. The number of shareholders present and the number of votes represented will be updated on an ongoing basis and I shall announce to you attendance before the vote on Agenda Item 1. I therefore note that invitations to today's Annual General Meeting have been issued in accordance with the Articles of Association and the law, and that the Annual General Meeting is duly set up and therefore coordinate for all agenda items. Anyone objecting to these statements, this is not the case, so thank you very much.
At the end of the General Meeting today, you have an opportunity to express your opinion or ask questions. Should you like to speak to take the floor, please first sign up at the speaker's desk on the left hand side of the room and let us know which agenda item you wish to speak on. You will then be called at the appropriate time and will be able to present your statement up front at the lectern. In order to keep the Annual General Meeting running efficiently, we would like to ask you to sign up at the speakers desks as early as now. Maximum speaking time will be three minutes. In general, I cannot really memorize any German statements longer than three minutes anyway.
The Board of Directors reserves the right to comment on questions in aggregated or individualized form or to further limit speaking time at today's meeting. We shall proceed according to the agenda shown here. After my remarks on strategy, our CEO Thomas Hasler will report on the past financial year 2024 under Agenda Item 1 and provide an outlook for the 2025 financial year. Daniela Schmiedle, General Manager of Sika Germany, will then provide insight in Sika's business activities in Germany. Ladies and gentlemen, I would first like to give you insight in the strategy 2028. We announced the 2028 strategy in October 2023 and have systematically implemented it from the start of the 2024 financial year. Where do we stand today with regard to implementation and what kind of success have we achieved?
Our 2028 strategy is based on four pillars, namely market penetration, innovation and sustainability, acquisitions, and employees and culture. We've set ourselves ambitious financial and non-financial targets in these four areas. Sika is and will remain a growth company that takes advantage of people, business opportunities, and generates added value for all stakeholders even under challenging economic conditions. It is our goal to grow by an average of 6-9% annually in local currencies. In the 2024 financial year, we managed to do so despite challenging market conditions. We grew by 7.4% and therefore achieved our target. We want to increase Sika's profitability disproportionately each year, which means we are aiming for higher growth than in sales. Our aim is to consolidate our EBITDA margin in the target corridor of 20-23% from 2026.
As soon as the synergetic effects of the MBCC acquisition have been fully realized, we were already able to increase our EBITDA margin by 110 basis points last year, taking an important step towards achieving the 20% target. The addressable market in our construction, chemicals and industrial business areas has an estimated global volume of around CHF 110 billion. Sika is the largest supplier with a market share of just over 11%. The market is generally highly fragmented. The 30 largest companies, for instance, including Sika, are holding around 55% of the market, while thousands of smaller suppliers make up the remaining 45%. There are still many opportunities for us to further consolidate the market and continue our successful growth strategy. Whether by organic or by inorganic growth, none of our competitors in the market is nearly as diverse and strongly positioned as Sika.
All eight of our target markets make a significant contribution to the total performance of our company. Each of the eight target markets contributes between 10-20% of group total sales. We do not have a dominant target market that would clearly outperform the others. The sales shares of all eight target markets are relatively balanced and represent our high performance and sustainable product portfolio and the innovations associated with it. As part of our sales strategy, we have a clear focus on vertical market segments with great business potential which we target through cross selling. Our largest vertical markets are infrastructure, commercial buildings, residential living, and automotive and industry, for example. Our customers from the food industry rely on a broad range of solutions in large commercial construction projects, from roof membranes to special concrete applications, fabrication sealants and waterproofing and adhesives through to floor coverings.
Finally, an entire product portfolio from the seven construction chemicals target markets is utilized. Cross selling in vertical markets enables us to continuously increase Sika share of the total project volume. External growth in the form of acquisitions also contributes to realizing our growth strategy. As a general rule, small and medium sized acquisitions account for around 1-2% of our annual sales growth. You're now seeing our acquisition activity displayed on the screen. Every year we screen an average of 70 potential takeover candidates. The number increases over various stages and on average our analyses result in three to five small or medium sized company takeovers. In the past five years we have successfully completed 15 small and medium sized acquisitions. This efficient process came to a slowdown in 2022 and 2023 as we were focusing on the major MBCC acquisition and therefore implemented fewer transactions.
However, in 2024 we regained our usual strength with around 80 screened candidates and we successfully completed three transactions in 2025 already. Now I would like to take a closer look at our largest acquisition to date, the acquisition of MBCC, around 6,100 employees and 100 factories. Many successful product solutions and countless innovations have been added to Sika through the acquisition of MBCC. In the past two years, a strong focus has been placed on successful integration. Now we can proudly say that we have achieved this. Last year, for example, we exceeded our own expectations in terms of realizable synergies with CHF 125 million. Following the closing of the transaction in May 2023, MBCC achieved a significantly lower EBITDA margin which we have been able to raise to almost the same level as Sika ever since.
The integration is almost complete and the focus now is on the market, on customers, and on leveraging the full power of this strong growth platform. We now have by far the most comprehensive product portfolio in the entire construction chemicals industry. In addition, we were able to integrate MBCC solutions and brands under the strong Sika brand at an early stage, a perfect prerequisite for further dynamic growth in future and for creating further added value for all our stakeholders and above all for you as shareholders and investors. Thank you very much for your kind attention. Let me now move on to the official part of the general meeting and allow me first to make a few comments on the voting procedure.
As you will have seen, we are using an electronic voting system for the votes operated by DiviGas Engineering and I would now briefly like to explain to you how to use the voting device. The device has three buttons. The top, the green button, is used to vote yes. The middle button is used to abstain and the button at the bottom is used to vote no. It is the red button. If you do not press any of the buttons during the voting window, this is considered an abstention or an invalid vote. As soon as I have explained a motion during today's meeting and the request to speak has been concluded, I will officially open a vote.
From this point on, your voting devices will automatically switch to voting mode and all three buttons will light up, which indicates that the voting device is ready. Should this not be the case, I would ask you to go to the check-in and have your device replaced. You will have five seconds for each vote to cast your vote, while a countdown of five seconds will be running on the screen. You can press the green yes button, the amber abstention button, or the red no button to cast your vote. If you have accidentally pressed the wrong button, you can cast your vote again within the voting time by simply pressing the button you actually wanted to press. Once the five seconds of voting time have elapsed, it will no longer be possible to correct your vote.
Short time later, the voting results will be displayed on the screen. If you notice that during a vote that your device is out of order, or if you have problems handling the device, please turn to checking. If you wish to leave the room during the meeting, please take your voting device and your voting material with you. Shareholders who wish to say no on a proposal can have their vote taken down in the minutes. If you wish to do so, we ask you to hand in your voting device at the end of the annual general meeting, stating your name at the shareholders registration desk, the Speaker's registration desk. Furthermore, every shareholder may request that their statements be recorded in the minutes. The exact voting results will be recorded and published in the minutes of the annual general meeting.
Now let's check on the functionality of your electronic voting devices. My test question is, did you know that Sika for the first time achieved sales in excess of CHF 11.7 billion in the 2024 financial year? When I've opened the functioning test, you will have five seconds time to cast your vote pressing the yes, the no or the abstention button. Please take your voting devices in your hands and the voting time is on now. The vote is now closed and the results will be shown in a minute. Great. It's a great result and goes to show that all of you have read the 450 pages. The vast majority of those voted knew that Sika generated sales of more than CHF 11.7 billion for the first time in the 2024 financial year.
Should you have discovered during the vote that your device is not working, or should you have problems handling your device, this is the moment to contact check in. Let me now move on to the attendance figures for today's annual general meeting. On the screen behind me, you can see the number of shareholders present today and the total number of votes represented, including the distribution of votes. We have 908 shareholders present. The total of votes represented is 99 million. No, 100 million. 335,700 treasury shares held by Sika and its subsidiaries are not entitled to vote and are not represented here. These figures will be recorded before every vote to take into account of people leaving or people entering.
According to our Articles of Association, the annual General Meeting passes its resolutions and carries out elections on the basis of the majority of votes cast, excluding abstentions and invalid votes and no votes, unless the law and the articles provide otherwise. The number of yes no votes and abstentions on the individual votes will be announced on each item. This brings us to the agenda items we have on the agenda today. This is the agenda for the annual General Meeting today, as you will have seen in the invitation. Now here we are. This is the agenda. It's a long list. I'm not going to read it off as you have had an opportunity to read it from the invitation. Let's begin with item one. Approval of the annual financial statements and the consolidated financial statements for 2024 at the media conference on 21st of February 2025.
We already reported in detail on the 2024 financial year. For further details on the annual financial statements and the consolidated financial statements for 2024, please refer to detailed information in Sika's 2024 annual report. Our CEO Thomas Hasler will now explain the business performance and provide an outlook for the current year. Following him, Daniela Schmiedle, the General Manager of Sika Germany, will then provide us insight in our business activities in Germany. Thomas, over to you.
Hello everybody and welcome. Not in the Waldmann Halle as previously, but here in the Congress Center, Zurich. I could also offer a few language variants, maybe East Swiss dialect, maybe a bit of German and English. No Flemish, I'm afraid, or French. I will stick to high German now and welcome you again. Thanks for appearing in such large numbers a year ago. I already said that this year's meeting would not be in the Waldmann Halle due to scheduling problems of the hall. We actually see that there are clearly more shareholders present today and that is something that we are very pleased with. I would like to put the year 2024 in context a little. We are in the golden twenties. We are in the roaring twenties, more like.
We start with 2020 Covid, of course, followed by recovery of the markets, then inflation and so on. It was a wild ride. If you look at the development of Sika during this period in key figures, we are stronger than ever also with regards to the future and the ongoing year. We see here sales from a little under CHF 8 billion to almost CHF 12 billion. Also in the Covid years there was already positive growth and even double-digit growth more recently, and here in last year we still had 7.4% strong growth. Not only the top line but also the operative results at EBITDA level, we see a similar picture. Successive improvements of absolute figures but also relative figures meant that in 2024 we reached a new high with 19.3% EBITDA.
Looking at net profit you see that we have one-off effects for example the transaction costs of MBCC and also in 2023. If you look more closely you can see that already in 2024 the tide turned where there was a return to solidity and we have more than 10% net profit and also made full use of the momentum of MBCC acquisition which is also reflected in profits per share. Yes, which actually improved by almost 50% in the same period. Similar development maybe not quite linear but still the MBCC transaction really needs to be taken into account here of course and also made a great contribution already as early as 2024 and allowed us more solid growth.
If you look at the dividend payouts for these years, past 10 years actually, then we see a 200% growth in dividends and in the last 25 years on average we've always had average two digit growth for dividend payments. I believe that that is also very relevant and worth pointing out that we are constantly improving here. Now sales, that was already named at CHF 11.7 billion, so distributed by regions. In the Americas for the first time we had CHF 4 billion plus with a growth of 11.2%. Very strong momentum in the Americas, but also the EMEA region is above CHF 5 billion for the first time with 7.3% growth, and if we remember that not too many years ago, 10 years ago, 11, the whole Sika group generated CHF 5 billion in sales.
This shows on what growth trajectory we are now and CHF 5.1 billion in our largest region alone which used to be about the figure for the entire group and also in Asia Pacific we see a very good CHF 2.57 billion plus CHF 2.4 billion and all in all for the group in local currencies it's at CHF 7.4 billion plus. We don't only measure ourselves against or with our key figures but also in comparison to the market. How is the market developing? How are our competitors developing? We want to get a positive momentum on market growth and if we look at the organic growth of Sika compared to our competitors, peers, we see that we are between 2-4% above our peers every year. Organic growth above market averages, the yellow field is about acquisitions.
We have some small and medium ones, but then of course MBCC that had massive effect in 2023 and also helped us strengthen ourselves further in 2024. Here we have the most important highlights of the last year put together in a slide talking about acquisitions. Besides MBCC, we had three important acquisitions that were realized. One in the U.S., Kwik Bond, a very technologically minded transaction with $100 million in sales in the U.S., especially important for the refurbishment of bridges. They have a very smart system that allows complete replacement of traffic lanes overnight where they can already be opened up for traffic again the next day. This is something that's already been certified in 30 federal states in the U.S. and we are busy on getting certification in the remaining states and of course adding our other products for bridge refurbishments and repair.
Besides sealing, we also have adhesives, of course, various mortars and coatings that could be used here. It is a wonderful transaction that also is well on the way to integration. In the Dominican Republic, we made an acquisition in the area of concrete or concrete admixtures. It is a small family-run company, but in that country is number one in the market and that is a growth market. There are big investments being made, lots of tourism. This is a small market where we were able to increase our footprint and offer a platform for further growth besides concrete, also in the area of infrastructure or commercial constructions. A transaction in Peru was realized or finalized in August last year. A typical transaction in a country that has a significant market.
Thanks to this transaction we were able to gain four additional sites in Peru, production sites, which gives us more access to business. It used to be previously about our adhesives, but now we have other areas where we can also be more present in this Peruvian market. These are three typical transactions, we call them boltons, that strengthen us in local markets, also in larger markets like the US by specific technology based acquisitions. In Peru, we additionally opened a new plant for fibers and we are already almost at full capacity after a few months. These macro fibers are used in mining for supporting mine constructions. In Latin America we have definitely raised our profile as a key supplier for these types of products. In China, we also opened a new.
Site.
For our phenomenal business that we already have there. We have 37 sites in China by now. In Liaoning, this new plant covers yet another geographic zone in that country and allows us stronger market penetration. In Indonesia, similarly, another very strong, strongly emerging market, we were able to open a new production facility or rather extend it considerably by doubling our capacity there. These are typical investments into organic growth, or as it may be, inorganic growth. Here I shortly digress into 2025 because also in this year our journey continues. In this year we already have three acquisitions under our belt. A green roof company in Singapore. This is another company, sorry, roofing company Cromar in the U.K. that are very strong in trading and another excellent acquisition in the U.S. where we acquired a majority stake in HPS North America.
This was concluded in March and we have a totally new plant opened, a mortar plant in Singapore, very high level market with very high demands and for us, potentially very lucrative and an investment that makes perfect sense at the beginning of this year. Back to 2024. Terry mentioned it. There's not only the financial side of things, but also non financial targets that we have set ourselves in the strategy. One of those goals is engagement rate of our employees. We had another survey last summer and reached 86%. That is an excellent result. Anything above 80% is rated as excellent. We have 86%. This is something you have to understand in the context that the 6,000 MBCC employees had been with us not even quite nine months yet at that point.
That shows us that the integration culture of the company is very strong and we were able to achieve a very high score despite great changes that were going on. Something else, Thierry mentioned safety. That is another key topic for us, not only to deliver excellence to our customers, our markets, but also to protect our people and take care of their safety. We see very impressive how the number of accidents has been steadily declining in the past years. On the one hand, that's a cultural aspect. We take it more and more as something natural that we try to take care of each other, look out for each other, minimize risks, ensure safety for every employee so they can go back home in a good state of health at the end of each working day.
Also in the survey that I showed previously, this was one of the topics with the highest approvals. Our employees are very aware of all this and this is something that is really put into practice on a daily level. Further, non-financial metrics, besides the already mentioned accident rates, reductions of resource use. For one, we have wastewater or waste in general. That was minus 4% water discharge by 7% and our net zero pledge that we entered into two years ago to do our homework for greenhouse gas reductions. Here we had more than 10% reduction in the year 2024. Once again, all these figures together, I won't go into them in detail now again.
I think you have also been able to look at them in our very extensive annual report, CHF 11.76 billion sales, EBITDA margin I mentioned before, the dividends raised to CHF 3.60 or the proposal at least, and then the further non-financial metrics that I just mentioned that hold great meaning for us.
What lies in store for us in 2025?
2025, I won't lie to you. The wild roaring twenties continue. What is going on geopolitically at the moment? I don't need to reiterate to you, you know, that there is a lot of insecurity in this world at the moment. Changing conditions all the time, tariffs, isolationism of various epicenters of the economy worldwide. It is a very challenging year.
As in the previous years, in the wild twenties, I think we have a chance to remain agile and to make use of this ability in a changing economic environment that we cannot directly change, but we can do our best and use all opportunities that arise on a daily basis and worldwide. On the basis of that we also wanted to confirm our strategic targets. 2028 in total for 2025 we are aiming for a 3-6% sales growth in local currencies and to continue with over proportional increase in EBITDA and expansion of EBITDA margin to 19.5% or 19.8% as we already informed you in Zurich previously. I would like to hand over the podium to Daniela Schmiedle, our General Manager in Germany. Before she comes up to the podium, I would like to make a brief announcement. It is a special day.
After 40 years. We will be saying goodbye to Monika Ribar. She has not only done excellent work in our Board of Directors, but she's also a role model within the company for Women Power, for active supporting of all our ladies working here. We have over 25% rate of female employees and more than 12 of the 102 countries in the world are actually managed by women. Of course, one very impressive example is Daniela Schmiedle, who has been very successful guiding our German department during these not always easy two years. Thank you, Daniela. Please join us.
Mr. Chairman, the shareholders, ladies and gentlemen, dear colleagues, my name is Daniela Schmiedle. I'm the General Manager of Sika Germany. Let me point out at this point that for more than 20 years I've been passionate working for Sika. Now I could add Swabian dialect to the languages used today, but as the previous speakers, I'm going to settle for proper German. Together with my powerful team, it's my focus in Germany to produce continuous and profitable growth, but also to drive ahead transformation of the construction industry in Germany. I'm very pleased to present to you Sika Germany today. Now this is a quick glance of the Federal Republic of Germany. We have about 85 million population currently. In terms of surface area, Germany is one of the smaller countries in Europe but with the largest economy, national economy. We are strong in terms of the economy.
In this chart you can see Sika Germany before the acquisition of MBCC Group. At the time we had eight production sites, four technology centers, and around 2,100 employees. The local footprint today is impressive. Following acquisition of the MBCC Group, four technology centers have turned into seven, eight production sites have turned into 12, and five storage and logistics centers, and the number of employees has risen to more than 3,400. Sika Germany has existed since 1982, based in Stuttgart. Sales growth actually happened in the past 20 years. As you can see here, sales growth in the past 20 years has grown fivefold. We've done so by organic growth, but we were also supported by acquisitions such as in 2006 Sarnafil and Addiment. In 2017 that was an important step for us in Germany.
The Schönox acquisition in 2021, you will certainly remember there was consolidation of the invest corrosion protection in Germany to refocus on our eight target markets. In 2023 the acquisition of the MBCC Group provided a lot of tailwind for us in Germany. What's the current economic situation in Germany? The previous speakers have touched upon it already. Germany following the financial crisis had very dynamic growth years. The COVID-19 pandemic, however, pointed out some structural deficiencies in Germany. We had a raw materials crisis that we were struggling with like others. You will certainly know that in particular in Germany, the energy crisis clearly had its impact, boosting inflation. In the meantime, inflation since last year has gone back to a normal level, which we're happy with.
Yet the economic situation in the past four wild years, the 2020s, was marked by a great deal of uncertainty, particularly due to the lack of certainty for energy supply. The construction volume in Germany has gone down continually simultaneously since 2022. The chart on the left hand side depicts that residential construction has been impacted most heavily. Sika has seven target markets in the construction industry. In this setting, we are holding up well. As you can see, there is a market segment that is growing nicely and that is civil engineering, underground engineering, and that is where Sika is at home. As you know, the past three years have been wild. Sometimes we felt as if we were on a roller coaster ride. I already mentioned the shortage of raw materials, uncertainty regarding energy supply, inflation going up, demographic change.
I think it's no secret to say that there is also a pretty much of over regulation in Germany, but the MBCC acquisition has provided tailwind to us in Germany. Under Sika Germany's protection we got five new product brands, four new companies, and a plus of one employees. We've done well in the past three years. We navigated well. How did we do that? We focused on profitable markets early on, in particular maintenance not only of infrastructure but also in the fields of commercial and residential buildings, always in conjunction with sustainable system solutions. Of course, such a situation requires maximum attention for changing conditions and I consider this very important.
We have an agile organization that adapts very well and very fast to change. The project and process management have been implemented as an organizational unit and of course what is also crucial is an iron will to succeed. We think in terms of solutions and all our workforce practices the Sika spirit. They're pleased to go the extra mile. Now what are the profitable markets that we have benefited from and are still benefiting from? For instance, the industrial sector in Germany. A lot of computing centers are being built today and battery factories as well, a lot of data centers. We are benefiting from new construction. The pharmaceutical industry continues to be profitable and as I mentioned before, the focus on maintenance of existing industrial buildings or refurbishment of them is very important.
As you certainly know, Germany has a very strong sector of and medium sized companies who want to retain their value and we seek a benefit from that with regard to refurbishment of infrastructure and of course the infrastructure sector not only for maintenance but also for new construction is very helpful. We focused early on on road and rail and tunneling and we have powerful research and development. We've got seven technology centers in Germany. The most recent building in Stuttgart was commissioned in 2022. Our research and development managed last year at product level to save more than 4,000 tonnes of CO2. 15% of first patent applications were from Germany in 2024 and last year we set up the Bad Urach we had a groundbreaking ceremony for the new Bad Urach technology center. I mentioned that the setting is volatile.
The good focus on profitable markets we can be successful, but of course the highest, the most valuable asset we have is our employees under Sika Spirit. The way we practice our Sika Spirit in Germany I would like to demonstrate to you by showing this quick film. That is our Sika Spirit. Of course we need to take care of Sika Spirit every day by many small activities. It is also supported by projects, day-to-day projects in our company. First and foremost, the global Sika Day that we celebrate once a year when employees come together on a certain subject matter. Sika Cares has become very essential for us. A lot of our employees conduct honorary functions contributing tremendously to our Sika Spirit. We have a project called Women at Sika which I find very important.
It was launched the beginning of this year and is meant to support and make visible the women working in the company. Encourage them to take the next steps. We would also like to present Sika as an appealing employer. The most recent project is called Young Generation at Sika. It is a project where Generation Z comes together for projects and submits proposals to the management on things that they consider to be helpful for business success. It is fair to say that every project submitted up to now has been implemented. Now let's look at the MBCC integration. What did we do? We were very quick in setting up a complementary product portfolio and launching the market beginning of 2024. Following that, we took a crucial step joining the sales organizations both in distribution as well as in direct distribution.
Beginning of the year we launched our branding strategy including dual branding which I'm going to present to you in the next chart. One of these companies, TPH, was fully integrated products basket. Fully integrated and in more than we rolled it out in more than 25 countries since mid last year. All units are working together smoothly. The company has become one unit and we are acting as one Sika. The complementary product portfolio. The new customer groups are the foundation of our success. There is a number of customer groups that complement, add to our business units, and tap into new potential. We've got very nice new products such as injections, silicones, polyure products, winter grouts, especially the wind turbine grouts are opening an entirely new field of business to us. Now for dual branding.
As you can see presented here in this chart, especially in distribution, we've got three additional products. PCI, Schönox, and THOMSIT . All of them have their own loyal customer groups. We decided for these product brands to continue to exist under the Sika umbrella brand dual branding. Everyone can see right away that it's a Sika product. The former product names are still there for us in Germany. The MBCC Group acquisition including PCI Augsburg has been a major step for us. You can see it in the chart in the pie in the middle. Before the MBCC acquisition, our share in the business was 23% in the distribution business. This is a great potential in Germany. Following the MBCC acquisition, as the pie on the right hand side shows, our share has grown to 43%.
With this share in sales, we now have access to this very important market with great growth potential where the strategy is to grow disproportionately in the years to come. Now, what is my market assessment for Germany? Beginning of the year we had the Great Trade Fair BAU in Munich for a week and it inspired us with great enthusiasm. We had a high number of customers, not only from Germany but from other countries as well and this week produced more than 500 valid customer contacts, customer contacts that we didn't have before the trade fair and customer contacts with specific potential. We were enthusiastic about our customers and the customers were enthusiastic about us. It's a great inspiration for us.
In addition to that, the future government in Germany launched and approved a EUR 500 billion infrastructure package, which is something that, honestly speaking, we've been waiting for years in Germany. It's a door opener for us to get the economy going again. We're more than happy for this to have succeeded, and I can assure you that my team has intensely been working for a week already to get ready for this infrastructure package, to adjust the sales teams, to make the portfolios available. We're really looking forward to this. Finally, I'll show you some pictures of the BAO Trade Fair. There's one thing that you can see in particular: the Sika yellow. It's a great team building event, especially for the new colleagues who've joined us. We are full of motivation.
We've taken home a lot of motivation from this trade fair and we simply knew that 2025 is going to be a good year. Thank you very much for your kind attention and trust.
Thank you, Thomas and Daniela. Thomas.
It's very impressive what has happened worldwide. Even though the markets weren't always easy and there were huge integration tasks we carried out, we've stayed true to our cause and we've kept our strategy going. That merits a round of applause in my opinion. Daniela, it's refreshing to see how a huge market like Germany doesn't see an integration like MBCC as an excuse not to provide excellence. Actually, it's an impetus to bring even more in a market that's not always easy. I'm looking forward, together with the entire Board of Directors, to come and meet you and your teams on site very soon. Thank you.
Let's come back to Agenda Item 1, the approval of the annual financial statements and consolidated financial statements.
These statements were checked by our statutory auditors and you can find all the reports on these statements in pages 25456 and 27375 of the annual report. KPMG recommends in the annual report to approve both of these statements. I would like to thank our auditors for the work they've done here. Here comes the proposal. On the basis of the report of the statutory auditors the Board of Directors proposes that the annual financial statements and the consolidated financial statements for the year 2024 be approved and I will be happy to take any contributions on that topic and I believe we already have somebody who would like to say something. Mr. Wild, if I'm correct, you would like to say something.
On this item we have heard a lot about the acquisition of MBCC and first of all I'd like to congratulate all of you on an operatively excellent job that was done here to integrate this company. My comments about the figures are compared to the figures in late 2022 to 2024 over a two year period and I made a very rough estimate that many things were not taken into account. Sales rose by CHF 1.2 billion approximately but then the costs cash went down by about CHF 1 billion, debt increased by CHF 2 billion and the intangible assets, goodwill, so imaginary assets, not something like a site for example, but these are figures that nothing you can grasp, that rose by CHF 4 billion, which means a doubling of this particular item. That makes a total of a sum of about CHF 6-7 billion.
If you put this in relation to sales, then we're talking about.
Well to.
Put it simply, about four times the.
Sales.
The costs are maybe four or five times higher than the sales increase, so this is really quite a rough estimate. I think that is a very expensive investment, and this is something that will really have to prove its worth in the future.
Thank you, Mr. Wild, for your question. Maybe there were a lot of figures here, so we hand over this question to Adrian Widmer.
Thank you.
I would be happy to reply as you already mentioned the integration is working very well. Synergies have been above our expectations and we are optimistic that further planned synergies will add up to another CHF 75 million in 2026. About the different items, the intangible assets CHF 1.3 billion, these were especially customer relations that were acquired, technology, brands. All of that needs to be depreciated as time goes by by international standards, and we apply these standards very conservatively. You said something about goodwill. It is going to get a little bit technical here. These are sort of profits that result from these synergies. The CHF 6 billion-CHF 7 billion, that is quite a high estimate. I think CHF 4.5 billion is more accurate that we ultimately counted for the MBCC acquisition.
That is the total value that we will also recoup very soon through the synergies already mentioned before. For further details, please go to 218 of the annual report.
Thank you, Adrian. I think there are further requests to speak, a Mr. Rupp. May I ask to elect him, please?
Mr. President, ladies and gentlemen, I'm very happy that we can meet in the Congress center here. It's a very nice atmosphere and we were received very generously with coffee and cakes and there's nothing wrong with that. The figures are also nice. Just so much to begin, but something I like less is that the entire literature is being thrown at us in English.
I think a company that is based in Baar, that is a Swiss company, ultimately should at least be capable of not just giving us a little book like this, but a summary of the figures in German to all shareholders. I think you need to make sure that you're not just thinking of the international audience here, but also take into account your local audience. It doesn't need to be.
An.
Entire additional reports of 400 pages or 200 pages. A summary, a brief overview with the most important facts and figures would be sufficient. I think many Swiss companies that are listed with the SMI do that as a matter of course and that is appreciated by their shareholders. About the dividends, I'm absolutely okay with that, but I would like to know what is the payout rate here? Those were my comments, but basically I would like to also congratulate you on a very nice AGM. We look forward to further additions, hopefully here in the Congress Center. Again, thank you.
I can really identify with your linguistic problems, but we actually did say that it would be available in German as well.
If we have somehow failed to deliver on that point, we will certainly make sure that we can improve this in the future because it would be a real pity if a large part of our audience would not be able to profit from this. Thank you about the positive words you have to say about our figures. No further request to speak. Payout ratio 47%. Okay. It is never enough. Of course.
Okay.
May I ask you to take your voting device in your hand and press the appropriate button about the proposal to approve the annual financial statements and consolidated financial statements. Voting starts now. The vote is closed. Result will appear in a few moments on social media.
Greek.
We see that you have approved the financial and consolidated financial statements for 2024. Thank you. Agenda Item 2. Appropriation of available earnings and repayment of reserves and capital contribution of Sika AG. The Board of Directors proposes that a distribution in total amounting to CHF 3.60 per share be made from this. CHF 1.80 is to be distributed from available earnings and CHF 1.80 from reserves from capital contributions. As you were able to make out from the invitation to today's AGM, we will vote on both of these items separately. The electronic system allows us to carry these out in immediate succession and to give you the voting results in aggregate at the end of proceedings. You can find more information on page 272 of the annual report.
The audience confirmed that the proposed appropriation of retained earnings complies with the law and the articles of association. Does anybody wish to speak on this agenda item? Therefore, I will forego the reading out in detail of both proposals. I would now ask you to take out your voting devices and press the appropriate button to cast your vote to the respective proposals of the Board of Directors. First, appropriation of Available Earnings 2.1 is now open. The vote is closed. Next, we come to agenda item 2.2. Repayments is. The vote is now open. Voting is closed. We now await the results. As you can see by the results displayed here, you have approved both proposals of the Board of Directors. Thank you very much. General Item 3. Granting discharge to the administrative bodies.
The Board of Directors proposes that the members of the administrative bodies be discharged. I would like to have one vote about this whole body. I would like to point out that in accordance with Article 695 of the Swiss Code of Obligations, all persons who have participated in the management of the company in any way are not entitled to vote on this agenda item, as are persons who represent the voting shares of persons who have participated in the management of the company. Does anybody wish to speak on this agenda item? It would appear not. Therefore, I would now again ask you to take your voting device and cast your vote. The vote on agenda item 3 starts now. Voting is closed. The results will appear shortly.
I take note of the fact.
That you have granted discharge to the administrative bodies.
Thank you very much.
Moving on with item 4 elections and beginning with 4.1 re-election of the Board of Directors. As laid down in our articles of association, we shall elect all members of the Board of Directors individually and for a term of office of one year. That is until the end of the next annual general meeting. We shall conduct the elections of all candidates immediately following each other and present the election results to you in aggregate form following the last vote. As you can see from the invitation dated 25th of February 2025, current members of the Board of Directors listed behind me on the chart are standing for re-election. They are all supported by the Board of Directors. Mrs. Monika Ribar unfortunately decided not to stand for re-election.
We will bid her farewell at the end of the meeting and honor her great services to Sika. Is anyone requesting the floor on re-election of the Board of Directors? It's not the case. Let's proceed to the vote. The Board of Directors proposes in accordance with agenda items 411 to 417 re-election of Thierry Vanlancker, Viktor Balli, Lucrèce Foufopoulos-De Ridder , Justin Howell, Gordana Landén , Paul Schuler, and Thomas Thomas Aebischer as members of the Board of Directors for a term of office of one year. Can I ask you to take your voting devices and cast your vote pressing the button of your choice on the board's proposal? We will separately vote on each person and the results will then be presented following the final round, beginning with the vote and re-election of yours truly. 411. The vote is open.
Please cast your vote.
The optimum is here.
The vote is closed. Next, vote on re-election of Viktor Balli. The vote on 412 is open. The vote is now closed. Can you perhaps add to the focus of the chart a little bit? Although Viktor really is in focus. Next, we're going to vote on re-election of Lucrèce Foufopoulos-De Ridder . The vote on 413 is now open. Cast your vote please. The vote is now closed. Moving on to re-election of Justin Howell. The vote on 414 is now open. Cast your vote please.
We come moving on to re.
Election of Justin Howell 414. The vote is on. The vote is now closed. We have not solved the technical problem yet. The focus now moving on to re-election of Gordana Landén . The vote on 415 is now open. Please cast your vote now. This is the vote and re-election of Paul Schuler. 416 the vote is on. Please cast your vote. The vote is now closed. Finally, we vote on re-election of Thomas Hasler. Vote on 417 is now open. Please cast your vote. The vote is now closed. We will be excited to see the results in a minute. All voting results from 411 to 417 will be shown on screen in a minute. Here they are. Re-elected. All candidates proposed at vast majorities. I congratulate my colleagues on re-election and thank you for your trust.
Moving on to item 4.2, the election of Kwak Wang Eng as a new member of the Board of Directors. Kwak Wang, or who goes by the name of Frankie, from 2015 to 2024 was the CEO of SGS, a company listed in Switzerland and a globally leading supplier of inspection certification services. In his 30 years of activity with SGS, he had various international management positions in China, Switzerland and the United States, gathering experience in the fields of consumer goods and industrial plants. With his background as the CEO of a globally operating company with a decentralized profile similar to Sika's, Frankie Ng has well established management knowledge and wide geographical experience. The Board of Directors is firmly convinced that Frankie Ng, given his comprehensive know how, will be a valuable new member of the Board of Directors and will support the growth strategy of the company.
Perhaps we can ask Frankie to briefly present himself.
Thank you, Mr. Chairman, ladies, gentlemen. Just a quick background myself. I was born in Hong Kong and I moved to Switzerland in Geneva when I was eight years old. I did all my primary and secondary schools in Geneva. My French is much, much, much better than my German. My approach is for that. I did my university degree in England. After England, I joined, as Mr. Chairman said, the SGS Group, which is the leading company in the inspection, testing and certification field. I spent 30 years there, eight years in China as the head of the operations, three years in the US as the head of Business Development and Sales, and then I went back to Geneva where I took different roles.
Global Head of Consumer Goods, Global Head of International Assets and the last nine years I was the CEO of the group. On a more personal note, I have two citizenships, Swiss and Chinese. I'm married with two children and my hobbies are generally hiking and skiing. I love Switzerland because I love the mountains here. Just looking forward to contributing to the Board and the management team of Sika and hopefully help to create some value to the shareholders and stakeholders. Thank you very much.
Thank you, Frankie. Now of course you're a dual citizen of Switzerland and China. That's the perfect blend for Sika, not only in terms of personality but also in terms of experience in business organization. SGS's business organization is very similar to Sika's. We're happy to have you as a future member of the Board of Directors. The application, the board's proposal, is in accordance with item 4.2, to elect Frankie Ng as a member of the Board of Directors for one year. Anyone requesting the floor at this point? How old is he? Frankie, someone is asking how old you are.
Fifty-eight.
Fifty-eight. I think we've broken about 24 laws. Anyway, the board's proposal is under item 4.2 to elect Frankie Ng. Please take your devices and cast your vote. The vote is on now.
The vote is closed and bear with me for the results. Frankie, congratulations on your election, by the way. The problem, the technical problem has not been fully solved. This is, we cannot have this picture more in focus currently. Moving on to 4.3. Election of the Chairman. The Board's proposal is to elect for a term of office of one year, yours truly as Chairman of the Board of Directors. The vote or the debate is on now. Anyone requesting the floor? No one is requesting the floor, so can I ask you to take your devices and press the appropriate button? Voting on election of the Chairman is on now. The vote is closed. Bear with me until the results are shown on screen. Thank you. For re-election of the Australia. Let's move on with Item 4.4.
Elections of the members of the Nomination and Compensation Committee. Our articles provide for the Annual General Meeting to elect the members of the Nomination and Compensation Committee. The members of the Nomination and Compensation Committee are elected separately and for a term of office of one year until the end of the next Annual General Meeting. We're going to conduct the vote individually on each candidate. The voting results will then be shown at the end of the last round. All current members of the Nomination and Compensation Committee are standing for re-election and they are supported by the Board of Directors. Anyone requesting the floor on this item is not the case. The Board's proposal is in accordance with agenda items 41-44 3.
The Board of Directors proposes the election of Justin Howell, Gordana Landén , and Paul Schuler as members of the Nomination and Compensation Committee for a term of office of one year. Please take your voting devices and cast your vote on the Board's proposals by pressing the corresponding button. Beginning with re-election of Justin Howell. The vote on agenda item 441 is open now. The vote is closed. Next, vote on re-election of Gordana Landén . The vote on agenda item 442 is open now. Please cast your vote. The vote is closed. Finally, we vote on re-election of Paul Schuler. The vote on agenda item 443 is open. Please cast your vote. The vote is now closed. Bear with me until the results will be shown on the screen. Here are the results.
Justin Howell, Gordana Landén , and Paul Schuler have been re-elected at vast majorities as members of the Nomination and Compensation Committee. Congratulations on re-election and thank you for your trust.
With that we come to item 4.5. Election of the statutory auditors. The Board of Directors proposes that KPMG AG be elected statutory auditors for the 2025 financial year. KPMG AG, who are present here today, have informed us that they would be happy to accept their reappointment if they are given the vote by the shareholders. If there are no wishes to speak on this, I would ask you to now cast your vote on agenda item 4.5. It is now open.
Of their line round.
You have reappointed KPMG as our statutory auditors. A large majority. Congratulations. Item 4.6. Election of the independent proxy. As stipulated by our articles of association, the AGM also votes on or elects the independent proxy. The Board of Directors proposes that Jost Windlin, Attorney at Law and Notary at Brightlaw AG in Zug, be elected independent proxy until the close of the next annual general meeting. Does anybody wish to speak on this item? It would appear not. Therefore, I would now ask you take your voting device and press the appropriate button. The vote on agenda item 4.6 is now open. Voting is closed. Results will appear any moment now. You have re-elected Mr. Windlin as independent proxy. Again, congratulations, Mr. Windlin. See you again next year then. Agenda item 5, sustainability report.
Sika AG is obliged to submit the Sustainability Report to shareholders for approval. You will see further explanation on this in the invitation to today's AGM. It can be found on pages 38 to 165 of the Annual Report. The Board of Directors proposes that the 2024 Sustainability Report be approved. Does anybody wish to speak on this agenda item? I see we have some requests. First of all, Mr. Helvenberger, please join us.
Dear Mr. Chairman, dear ladies and gentlemen, shareholders, from the Sustainability Report, I see that Sika is very motivated to transform itself into a sustainable, sustainable and sustainable company. This is something that makes me very happy and proud. What I was also pleased about today is what is going on in Germany, what Mrs. Schmiedle was telling us about, about the Sika spirit.
Nonetheless, I am very worried about the situation of the world these days. Everything seems to be forever until it's suddenly not there anymore. Systems that seem stable can suddenly become instable. In your sustainability report on page 72, a lack of talents, of new talent is named as a main problem of sustainable Sika. A strong society is the basis for well trained and satisfied professionals. My question to you at this moment, can you imagine actually investing even more into the development of our people, even if this is not a key point, for example, by time budgeting or voluntary work during work to foster more togetherness, to support them in initiatives to social ecological transformation and also to create rooms for dialogue and mutual communication and support such efforts by sponsoring.
I am aware that this is something that asks for resources and maybe a little bit of a dividend.
Even.
Personally, if it was reduced to only 45%, I would be fully in agreement. I think investing into human capital is something that goes way beyond key figures. It can increase the bond between Sika and its employees and it can solidify the reputation of our company in society. This is something I try to bring to you. In a nutshell, let's try and bring the Sika spirit into the society at large. Can we do that? Maybe Sika employees can also be involved in civil society. If Sika would support such efforts, that would be a wonderful thing. Thank you very much,
Mr. Helfenberger. Thank you for your question. We understand that the geopolitical situation naturally has effects on our company.
Daniela already explained in her presentation what we're already doing for our employees, their mental health and mental well being as well as voluntary work. That's already a well established tradition. Sika doesn't think it's a choice between a dividend or more social engagement. Thomas, maybe you could give us a few more details or figures about this ongoing effort that's been already part of the Sika culture for a long time.
Of course, it's a topic that hasn't just arrived a few years ago. It has a long tradition at Sika because already in the early years, when Sika started expanding from Switzerland into the world market, it was noticed that our employees, even in difficult times, could find themselves in difficult times. There was a very strong need from the beginning to strengthen them to support them. This is something that developed through the years.
Six years ago, we.
Rebranded, if you.
Will, under the name Sika Cares. It is the concept of being active in supporting our employees, always close to our sites, where our employees live and work and where they can really immediately see the effects of such support and where there is a possibility to make a contribution through voluntary work. In the last year, in 64 countries, there were more than 500 initiatives at local level that were supported with voluntary work. For example, by redecorating a local school, by helping with the local library. These are things that really support some of the most disenfranchised people. We are very happy that these kind of efforts are being enrolled on worldwide scale. The time that is being invested by our employees is also sponsored by our company.
We also financially support such efforts or maybe supply products that are needed for renovating, let's say, a school building. It is something that is very deeply entrenched in our culture. We admire the willingness of our employees to engage in this. We also want to give back to those who are less fortunate, wherever they may be. This is not something that needs to be decreed from above. We are always very happy about the initiatives that develop from our employees. We, of course, are always trying to support such initiatives. It is something that makes us proud and where we absolutely want to be involved. It is not just some fad, some passing fashion. It is something that has been cultivated here for a long time. It is just something that happens on a daily basis.
Our people, sometimes they even go to slums or regions that are experiencing great problems. That also is an example of team spirit. Daniela Schmiedle mentioned how it makes us proud to do something good together.
Thank you, Thomas. I do not think that there are any further requests to speak on this agenda item. Therefore, I would now like to proceed with the vote. The Board of Directors proposes that the 2024 Sustainability Report be approved. Please take out your voting devices and press the appropriate button. Voting on agenda item 5 starts now. Voting is closed and you will see the results shortly. You have approved the 2024 Sustainability Report. Thank you. Thank you, Ms. Heidtman and the whole group who took the trouble to draw up this fantastic Sustainability Report. We now come to item 6, compensations. 6.1 consultative vote on the 2024 Compensation Report.
Maybe a small explanation. The compensation report explains the remuneration system and programs to the Board of Directors and the Group Executive Board as well as the remuneration paid to members of both bodies for the 2020 financial year. The compensation report can be found on pages 185 to 206 of the annual report. The remuneration of the Board of Directors continues to consist of a basic fee for work on the Board of Directors as well as additional remuneration for work on various committees of the board. You can see the system on the slide here. The compensation model for the Group Management consists of fixed remuneration and variable remuneration. Variable remuneration consists of an annual performance bonus and a long-term profit participation plan. The amounts actually paid out are shown here on the slide. They are within the maximum amount authorized by the Annual General Meeting.
You now see the slide of the amount actually paid out in the 2024 financial year for the management amount. These are CHF 3.27 million, which is in line with the remuneration approved by the AGM. The remuneration of the executive board for the 2024 financial year totaled CHF 19.9 million and was therefore below the limit of CHF 21.5 million approved by the AGM. Targets were achieved, but not to the extent that would have warranted a maximum bonus payment. You can therefore see that we set ourselves ambitious goals every year. We now come to the proposal, the Board of Directors, that the 2024 compensation report be approved in a non-binding consultative vote. Does anybody wish to speak on this agenda item? Mr. Sorry, just a moment. You already gave us your name in your first group compensation.
Oh, yes. I am Walter Grob from Berlin.
I would like to. I do not want to in any way make light of the great achievement that this represents. Be careful of excessive behavior. If these salaries in the millions continue, there will be a referendum sooner or later here in Switzerland. Let me warn you about that. Try and moderate it. Be sensible and give more participation to people in all these countries across the world, wherever they may be working, not just the bosses. Remember that Sika has a social obligation not to only fill their own pockets. I'm sure that you have worked very hard, but let's not exaggerate here. Thank you.
That's very good advice. I think, as you can see, we're already putting it into practice. The company always strives to achieve a balance, to let our employees participate.
We also try to be in the midfield and avoid any excess, because sooner or later that will have a negative impact. I would like to say we do not just make up these salaries at the Board of Directors level or management. Every couple of years we make a benchmark and see what the standard practices are at the moment. I think this has been a very important factor in our success to be exemplary, specifically with how we handle compensations. Are there any other requests to speak? If not, I would like to ask you to take out your voting device and press the appropriate button. Voting on item 6.1. The consultative vote on the 2024 compensation report starts now. Voting is closed and we will see the results promptly. You have approved the 2024 compensation report. Thank you.
We come to agenda item 6.2. Approval of a future remuneration of the members of the Board. The Board of Directors proposes that a maximum total amount of CHF 3.4 million be approved for the Board of Directors for a term of office of one year until the close of the next annual general meeting. You will find, or you can.
See the figures in the slides.
The amount is made up as follows. CHF 1.6 million in fixed remuneration, CHF 1.6 million for share-based remuneration, and CHF 200,000 for Social Security contributions. The structure and maximum amount for these compensations applied for are unchanged from the previous periods. This brings us to the proposal. The Board of Directors proposes that a maximum of a total amount of CHF 3.4 million for the Board of Directors consisting of eight members be approved for a term of office of one year until the close of the next Annual General Meeting 2026. Are there any requests to speak? I do not see anyone. We continue without further ado. Take out your device and press the appropriate button. Voting on item 6.2 begins now. The optional Sdslossen votes is now closed.
Bear with me until the results are shown on screen. Here they are. You have approved the future compensation of the members of the Board of Directors. Thank you very much. Moving to item 6 3, approval of the future compensation for the group management. Now allow me to give you some additional explanations. The total amount proposed for the 2026 financial year is slightly higher than the total amount approved for the 2025 financial year. The increase already anticipates the amendment to the Articles of Association proposed under agenda item 7 1, which would allow for higher performance related compensation provided the corresponding targets are achieved to the maximum extent possible. The total amount proposed includes CHF 8.8 million for fixed compensation, CHF 10.8 million for a performance bonus.
The actual payout will be made in 2027 and CHF 6.4 million for allocation of entitlements to Sika shares under the long term incentive plan for the 2026-2028 performance period. The actual payout in shares will be made in 2029. Let me point out, we are talking about a maximum amount for almost two thirds of the amount proposed. That is for the performance bonus and the long term incentive plan. The actual payout depends on target achievement. The 2024 financial year demonstrates that we set ourselves ambitious targets and that even excellent results do not automatically lead to maximum payout. Moving on with the proposal, the Board of Directors proposes approval of the total amount for compensation of the Group Management consisting of eight members of a maximum of CHF 26 million for the 2026 financial year. Anyone requesting the floor on this item?
That's not the case. Please take your voting devices and press the button of your choice to cast your vote. The vote is on. Six three is open now. The vote is closed. Bear with me until the results are shown on screen. Here we are. You have approved future compensation of the Group Management. Thank you. Moving on to Item 7. As mentioned under Item 6, the Group Management receives fixed and variable compensation. Variable compensation consists of a performance bonus and a long term incentive plan. Previously, the Articles of Association stipulated a limit, a cap on the performance bonus paid out and the value of the entitlements allocated under the long term incentive plan. The limit, the cap, was a maximum of 200% in total and 300% for the CEO. This in relation to fixed compensation. In practice, this link has proven all too rigid.
The proposed solution set separate limits for the performance bonus and the long term incentive plan. It dispenses with a link to fixed compensation and a separate solution for the CEO. The new limit now is 200% of the performance bonus paid out in relation to the target performance bonus. Under the long term incentive plan, shares allocated can amount to a maximum minimum of twice the originally defined number of entitlements. As a result, we are strengthening performance related compensation which benefits both the company and U.S. shareholders. The proposed wording for the amendment to the Articles of Association can be found in the invitation. It will be shown on screen, but I hope I won't have to read that out to you. Let's move on to the proposal.
The Board of Directors proposes that the compensation cap for the variable compensation of the group management with separate limits for the performance bonus and the long term incentive plan be replaced. The Board of Directors proposes to amend, delete, or supplement the articles in the Articles association mentioned. Anyone requesting the floor? It does not seem to be the case. Please take your voting devices and press the button of your choice. The vote on item 7 is on.
Now.
The vote is closed. Waiting for the precise result of the vote. You have approved the proposal. The Board of Directors with regard to the amendment of the articles. Thank you very much. The main thing we are going to deal with at this AGM is. Of course that was just an excuse. Anyway, as I mentioned before, Monika Ribar unfortunately is stepping down. Is not standing for re-election. Dear Monika, with this an era comes to its end. At Sika, you have been a member of the Board of Directors since 2011. From 2012 to 2024 you chaired the Audit Committee. In both capacities it's fair to say that you played a key role in shaping Sika success. The growth alone since you took office speaks volumes. Turnover rose by 158%. Profit increased by 480%, which is very impressive indeed.
Anyone familiar with Sika's history knows that these figures are only telling half the story. From the end of 2014 to mid 2018, this company was involved in an existential takeover battle. It was not least due to your courage and perseverance, in conjunction with the other independent members of the Board of Directors, that Sika emerged victorious from this conflict. Dear Monika, on behalf of the Board of Directors and the Group Management and I personally would like to, and also on behalf of all the shareholders present here today, I think I would like to thank you for your great work and your contributions to the Board of Directors and the Audit Committee, and above all for your deep and genuine commitment to Sika. We wish you and Marcel all the best. The Board of Directors will never be the same again.
Ladies and gentlemen, wonderful flowers. I'm very happy receiving them. I won't keep you from drinks outside. All I want to say is you cannot summarize a period of 14 years. It's impossible. So many things have happened and Jerry said it. In these 14 years, I've come to like this company very much. I hope the same applies to you, otherwise you wouldn't be invested in it. What I can say is you are investing in a great company. The 35,000 employees, seekers. We heard it today, several times. We heard it today. Who do their job out there every day. That's what counts. You've got group management and the Board of Directors who are committed to keeping this company on its track and getting it. Enable it to navigate through the waters. I would like to thank all of you for trust.
The company needs trust. I hope you will remain loyal investors in this company. Thank you very much. I would like to thank all my colleagues. Thank you, Monika. We said goodbye to her yesterday already in a small circle. This brings me to the end of the official part of this year's Annual General Meeting of Sika AG. Once again we have experienced an Annual General Meeting with overwhelming support from you esteemed shareholders. I would like to thank you for your loyalty to Sika and your trust in the Board of Directors and the Group Management. We will do everything in our power to continue to justify your trust in future. The next and 58th Annual General Meeting will be held on March 24, 2026 again here at Congress House of Zurich. I look forward to welcoming you again in such large numbers.
I would like to ask you to hand in your headsets and your voting devices to the Sika helpers passing around or to leave them on your chairs. Following the annual general meeting, there will be stand up drinks at the ground level. I would like to cordially invite you all to stay and join us for a toast. I hereby declare close the 2025 annual general meeting. Thank you very much.