Dear shareholders, ladies and gentlemen, I would like to extend a very cordial welcome to you to the annual general meeting of Sika AG. It is a particular pleasure for me to welcome so many of you here today to Congress House of Zurich. I would particularly like to welcome the members of the board of directors and the group management, as well as the Sika employees present, and Dr. Paul Schuler and Monika Ribar, of course. Joining me on the podium, we have Thomas Hasler, our CEO, Adrian Widmer, our CFO, and Sebastian Bättig, head of corporate legal, and secretary of the board of directors. On site we have more than 20 Sika employees on duty, working in various places. I would also like to extend a warm welcome to these hardworking helpers and thank them for their efforts. Safety is a top priority at Sika.
Every event begins with a safety moment, and this is why I would also like to give you some important information on safety at the start of the annual general meeting. The entire building has emergency exits, which are clearly marked. You can see them, for instance, on the sides here in this hall. In the unlikely event of an evacuation, I would like to ask you to use the appropriate emergency exit and leave the building by the most direct route. An emergency team identifiable by high visibility vests will assist you. The assembly point is located on the other side of the road on the lakeshore. You can also see it on the map that is being displayed. Now let me continue and set up the annual general meeting today.
The invitation to this general meeting was issued in accordance with the statutory and legal requirements, both in due form and within the prescribed time limit, through publication in the Swiss Official Gazette of Commerce on the 24th of February 2026, and by written notice sent on the 25th of February 2026. The invitation contained the agenda items as well as the proposals of the Board of Directors. From February 24, 2026, the annual report, the auditor's report, and the compensation report have been available on the website for shareholders to view. We have received no request to add items to the agenda within the published deadline following the company's call in the Swiss Official Gazette of Commerce on the 23rd of January 2026. The minutes of last year's annual general meeting were signed by the chairman and the minute taker.
They were available for inspection by shareholders at the company's head office and were also published on the internet. Now, pursuant to our articles of association, I shall chair this general meeting as Chairman of the Board of Directors. Mr. Sebastian Bättig is going to keep the minutes today, and in this context, I would like to draw your attention to the fact that the general meeting is being video recorded and broadcast live on the internet via a web stream. The minutes of the general meeting, as well as the presentations, will be available from our website, and these can also be sent to you upon request. We will now proceed to the appointment of the tellers whose names are being displayed on the screen behind me.
The tellers will be used only in the event that the electronic voting system fails, and we have to vote using the voting coupons attached to your admission cards. Ms. Caroline Inauen will be the head teller. I would like to thank the tellers, ladies and gentlemen, for performing this task. The statutory auditors, KPMG AG, are represented by Mr. Toni Wattenhofer and Miss Anna Pohl, whom I also warmly welcome. I welcome Mr. Jost Windlin, lawyer and notary public at Bright Law AG in Zug, as the independent proxy. He will vote in accordance with the instructions given to him by the shareholders. I would like to thank Mr. Windlin for accepting this mandate and would like to ask him to stand for a moment. Thank you.
Shareholders must be informed at the annual general meeting if the independent proxy has already notified the company of the voting instructions received prior to the annual general meeting. I hereby inform you that Mr. Windlin has not provided the company with any information regarding the voting instructions received. Shareholders were also able to participate in today's annual general meeting by submitting proxies and instructions electronically to the independent proxy. Electronic participation and any amendments to instructions submitted electronically were possible until 11:59 P.M. on Sunday the 22nd of March, 2026. As in previous years, shareholders also had the option of signing on an online platform to ask questions verbally at the annual general meeting.
In this context, I would like to remind you once again that shareholders attending the annual general meeting via web stream were able to exercise their shareholder rights either through the independent proxy or by granting a proxy to a third party prior to the annual general meeting today. It is not possible to exercise shareholders' rights via the online platform. Finally, I would like to take this opportunity to extend my sincere thanks to Mr. Dominik Slappnig and his team for organizing the event today. The number of shareholders present and the votes represented are updated continuously. I shall announce the attendance figures before the vote on agenda item one.
I therefore confirm that the invitation to today's annual general meeting was issued in accordance with the articles of association and the law, and that the annual general meeting is duly set up and thus has a quorum for all agenda items. Anyone against these findings? Any objections? This is not the case. At today's general meeting, you have the opportunity to express your views or ask questions. If you wish to speak, please first register at the speakers registration desk on the left-hand side in the hall and let us know which agenda item you wish to speak on. You will then be called upon in due course and may deliver your remarks at the lectern here at the front. To ensure the general meeting runs efficiently when members wish to speak, we ask you to register at the speakers registration desk as early as now.
Maximum speaking time will generally be three minutes. Shareholders also have the opportunity to sign on via the online platform for taking the floor via the web stream. However, no such requests have been received. The Board of Directors reserves the right to respond to questions in aggregate or individual form or to further limit speaking time. At today's meeting, we shall proceed in accordance with the agenda shown here. Following my remarks on strategy, our CEO, Thomas Hasler, will report on the past financial year, 2025, under agenda item one and provide an outlook for the 2026 financial year. Ivo Schädler, head of construction and member of the group management, will then explain how Sika is supporting the globally booming data center industry with innovative technologies in an area that has become a key growth driver for us.
Ladies and gentlemen, first of all, I would like to discuss Sika's share price development. Our share performance in 2025 remained well below key stock indices and also below our own expectations. The price performance reflects the cautious sentiment in the global construction industry, characterized by difficult end markets. At the same time, it illustrates the adjustments made to our growth expectations in the past financial year. By reducing our medium-term annual sales growth targets from 6%-9%, from 3%-6%. The difference lies in the fact that the exclusion of the market growth element was added, these were elements that were previously factored into our targets. At Sika, regional diversification is a strength. Our global presence and our local roots with production on-site enable us to cope well with geopolitical complexities.
However, since 2025, Sika has also been caught in the crossfire of geopolitics. Of course, it doesn't help that our two strongest markets, the USA, accounting for around 20% of sales, and China, representing up to 9%, were impacted by these geopolitical developments in the past year. On the one hand, these were shaped by tariffs, which greatly unsettled the markets, and on the other hand, by the crisis in the Chinese residential market. As Sika is the only provider of construction chemistry that is present in China. We were realizing 4% revenue. The Sika share closed 2025 with a drop of 23.6%, while the SMI went up by 14.1% in the same period.
Compared with the global construction markets, which declined by about 2.5% last year, Sika posted a good result in 2025 and achieved a slight gain of 0.6 in local currencies. Even 3% above market. We have continued to implement our strategic priorities and once again, despite a challenging environment, we are able to succeed in expanding our market share. This is not something we take for granted. It is the result of systematic strategy implementation and a corporate culture based on performance, innovation, responsibility, and a clear customer focus. Fundamentals are strong, our strategy is clear, our innovative strength is unbroken, and our market position is now stronger than ever.
The whole team at Sika is working day in, day out to create value for you, and we are convinced that the financial market will recognize this strength sooner or later. Allow me to now give you an insight into our Strategy 2028. We announced this strategy in 2023 and since then have been continuously implementing it. Today, I would like to show you where we stand in terms of the implementation and what progress we have already achieved. Our Strategy 2028 is based on four key pillars, market penetration, innovation and sustainability, acquisitions, and finally, employees and culture. In all four areas, we have set ourselves ambitious goals of financial and non-financial nature. Also, in the year 2026, Sika will continue to pursue these goals resolutely. We want to grow even in a challenging market environment.
The focus here is on gaining market share while at the same time increasing profitability. Specifically, we have set ourselves the medium-term goal of achieving annual growth in local currencies of between 3%-6% above market. This growth comprises around 1%-2% by value-adding acquisitions and organic growth. In terms of profitability, we are aiming for a corridor of 20%-23% in EBITDA. Without last year's investment in the Fast Forward program, Sika would have achieved an EBITDA margin already of 19.2 in 2025, which would correspond to the second highest figure in our company's history. Important key figure here is the strong cash flow generation. As part of our defined goals, we want to achieve an operating free cash flow which amounts to over 10% of sales.
Sika's figure of 12.1% in 2025 exceeded this target for the third consecutive year. Sika operates in an attractive market environment. The addressable market in our business areas of construction, chemicals, and industry has an estimated global volume of around CHF 100 billion. With a market share of 12%, Sika is the biggest provider. The market is highly fragmented. The 30 largest companies, including Sika, hold around half of the global market share, while thousands of smaller providers make up the remaining 50%. Sika has considerable opportunity to further consolidate the market and to achieve long-term profitable growth. None of our competitors has the same broad-based, strong position as Sika. All of our 8 target markets provide a significant contribution to our company's overall performance.
Each of the 8 target markets contributes between 10%-20% of total group sales. A very balanced portfolio that strengthens our resilience and ensures stability. Our sales strategy is clearly focused on vertical market segments with considerable business potential. Our largest vertical markets, which Sika serves with its products and solutions, are infrastructure at around 30% of sales, commercial construction at 35%, residential construction at about 20%, and automotive and industry at around 15%. For example, our customers worldwide who build data centers rely on our broad solutions portfolio, ranging from high performance roof membranes through concrete admixtures for special applications, versatile sealants and adhesives to reliable flooring and waterproofing. Ultimately, the entire product portfolio of Sika comes into play when constructing data centers.
Thanks to targeted cross-selling in the vertical markets, we are able to steadily increase the share of Sika technologies in the respective project. While net indebtedness in 2025 declined by around CHF 300 million, the debt level measured in terms of net debt in relation to EBITDA rose on an adjusted basis to 2.3 times. Adjusted for the impact of our Fast Forward investment program on EBITDA, this figure is unchanged at 2.2. Sika has a strong investment-grade rating. For 2026, we also expect a robust operating free cash flow result. The Board of Directors believes that we should deploy our capital in order to generate the maximum value for our shareholders. Generating strong cash flow opens up enormous scope in terms of our capital allocation policy, which is geared to high and long-term value creation for our shareholders.
Our top priority is to promote organic growth. At the same time, we are increasing profitability through high-yield investments and value-adding acquisitions, where cost synergies allow us to achieve above average returns. We have tried and tested strategies for quickly achieving synergies with smaller and medium-sized acquisitions. We will continue to reward our shareholders with a progressive dividend policy that enables efficient capital management and continuous increases in returns. Opportunistic share buybacks will also be considered, provided that after all other uses, including further debt reduction, there is free cash flow available. Our target is clear. We want to create from these financial resources the greatest possible value. We therefore always consider carefully which use of the cash flow promises the highest return for Sika shareholders. In particular, external growth in the form of acquisitions contributes to implementing our growth strategy.
As a rule, smaller and medium-sized company takeovers contribute around 1%-2% to our annual sales growth. In 2025, we completed seven of these acquisitions. All of them are now being carefully integrated and are making a valuable contribution to our further value creation. I would now like to address our biggest acquisition to date, that of MBCC. Over the past three years, the focus was clearly on achieving a successful integration. We are proud to say that we have succeeded. For example, last year, we even exceeded our own expectations in terms of achievable synergies with a figure of CHF 182 million. After the closing of the transaction in May 2023, MBCC generated a considerably lower EBITDA margin of 15%, which we have since raised to around 20%.
Integration is almost completed, and the focus is now on the markets, on customers, and on making full use of this strong growth platform. We now have by far the most extensive product portfolio in the entire construction chemicals industry, an ideal prerequisite for generating further dynamic growth in the future and creating additional added value for all our stakeholder groups, and especially for you, our shareholders. I would at this point like to thank the worldwide Sika team once again for their excellent performance in a very difficult environment in 2025. Thank you very much.
Let me now move on to the official part of the annual general meeting, and allow me to make a few remarks regarding the voting procedure. As you will have seen, we're using an electronic voting system for the votes. It is operated by Devigus Shareholder Services. I would now like to briefly explain to you how to use the voting device. The voting device has three buttons. The top button is for voting yes, the middle button for abstaining, and the bottom button is for voting no. If you do not press any of the buttons during the voting window, this will be counted as an abstention or an invalid vote. As soon as I have explained a motion in the process of today's meeting and the floor has been closed, I will officially open the vote.
From this point onwards, your voting devices will automatically switch to voting mode, and all three buttons will light up. This indicates that the voting device is available for voting. If this is not the case, please take your voting device to access control to check in, to have it replaced. You will have 5 seconds to cast your vote. It's quick. While the 5-second voting period is being counted down on the screen, you may cast your vote by pressing the green Yes button, the amber Abstention button, or the red No button. If you have pressed the wrong button by mistake, you can cast your vote again within the voting time by simply pressing the correct button. Once the standard 5-second voting period has elapsed, it is no longer possible to correct your vote, unfortunately.
Shortly afterwards, the voting results will be displayed on the screen. If in the course of a vote you will find your device is out of order or you're having difficulty operating it, please contact the check-in desk. Should you wish to leave the hall during the meeting, please take your voting device and the voting material with you. Shareholders who vote against the motion have the option of having this recorded in the minutes. To do so, please hand in your voting device at the registration desk after the general meeting has concluded, stating your name. Furthermore, any shareholder may request that their statements be recorded in the minutes. The exact voting results will be recorded in the minutes of the annual general meeting and published as such. Now, we shall check the electronic voting device whether it's working properly.
To do so, here is my trial question: Did you know that Sika achieved turnover of CHF 11.2 billion in the 2025 financial year? Once I have opened the trial test, the trial time, you will have five seconds to cast your vote by pressing the appropriate button for yes, no, or abstention. Please take your voting devices now and vote on this trial question. The vote is open. Please select yes, no, or abstention. Voting time is up. The results of the vote will be available in a few moments. You can now see the voting results on the screen. The vast majority of voters were aware that Sika generated revenue of CHF 11.2 billion in the 2025 financial year.
If you noticed in the course of the vote that your device is out of order, or if you are still unsure how to use it, please contact the check-in desk as swiftly as possible. I'll now turn to attendance figures at the annual general meeting today. On this screen behind me, you can see the number of shareholders present and the total number of voting rights represented, taking into account the representation ratios. As you can read, we have 88,144,897 in total of votes, and you can see how many are represented by the independent proxy and by the shareholders present. The shares held by Sika and its subsidiaries do not carry voting rights and are therefore not represented.
These figures are recalculated before each vote to take account of shareholders joining or leaving in the course of the general meeting. Pursuant to our articles of association, the general meeting passes its resolutions and conducts its elections by a majority of the voting rights represented, excluding abstentions as well as blank and invalid votes, unless the law or the articles of association contain provisions to the contrary. The number of yes votes, no votes, and abstentions for each vote will be announced for every item on the agenda. Now, this brings us to the agenda today. You can see the agenda for the annual general meeting today, and you have already seen it in the invitation. For this reason, I shall refrain from reading out the individual items on the agenda.
We're going to start off with item number one, approval of the 2025 annual financial statements and consolidated financial statements. We have already reported in detail on the 2025 financial year at the press conference on the 20th of February 2026. For further details on the 2025 annual financial statements and the consolidated financial statements, I would refer you to detailed information in Sika's 2025 annual report. Our CEO, Thomas Hasler, will now outline the business performance and provide an outlook for the current year. Ivo Schädler, Head of Construction, will then give us an insight into Sika's high growth data center business. Thomas, may I ask you to come to the lectern?
Hello, and a cordial welcome to the annual general meeting of Sika 2026. Before I look back on 2025, I would first like to thank all the 33 employees of this company for their tremendous effort in a highly turbulent year, their commitment, and their agile way of coping with many adversities, and for the support they provided to us to make sure we're doing an ordinary business, although the markets have been everything else than supportive. Before I talk about the figures, this is the foundation the company has built up in recent years. As Mr. Van lancker has pointed out, we are active in very large markets, hundreds of billions. We're market leader at 12%, and the market share of 12%. Through innovations and performance of our products and systems, we have well established our market shares. We are outgrowing the market.
We are growing profitably, and the markets currently certainly are not ideal at all. The business cycle in the construction industry is, of course, marked by the uncertainty in recent weeks and months, and yet we outperformed again in 2025 and produced excellent results. We've also identified that this weakness in the economy will probably continue in 2026, and that's why we took preventive measures in the form of the Fast Forward program to respond to the structural changes, weaknesses, and to invest in substantial increases in efficiency in the future to retain our market leadership through the new digital means. As I mentioned, the acquisitions have a long tradition in the company. Small and medium-sized acquisitions to reinforce our local presence and use them as an extended growth platform.
I'll present to you some examples of what we did in the past year in this regard. Let's go back to the market. As I mentioned before, the relevant global market, all the markets we are active in, declined by 2.5%. The year actually got off to a good start, an excellent start in North America, with the momentum reshoring of the industry drove that. Unfortunately, at the end of February, it was abruptly challenged when all the tariff issues arrived and with their implications and their influence on other markets, in particular China. The big markets, China and the U.S., big markets for us, suffered most in China. It was particular housing construction that receded by 45% in the past 2 years due to the lack of optimism among the Chinese.
Of course, as a result of that, there is reticence in investing in own housing. Towards the end of the year, add to this the unexpected shutdown in the U.S. The U.S. government shutdown, the longest shutdown in the history of the U.S. Activities that were ready to be implemented were prevented because authorities were not active, didn't issue the necessary approvals, didn't launch projects. As I mentioned before, below the line, in 2025, we achieved growth in local currencies of 0.6%. Of course, you can clearly see the influence of the Swiss franc, strong Swiss franc, that appreciated by 5.4%. This had an impact on the figures, sales and profit margin, EBITDA. As mentioned before, in the history of Sika, these are excellent results.
Second-best result for EBITDA development and for sales, also the second-best annual result below the line. In EBITDA, you can see the influence by the Fast Forward program and its one-off cost. The reported result at 18.4% of return was decreased because of the one-off cost. Otherwise, it would have been 19.2%. Now, this investment campaign or efficiency program has two objectives, really. On the one hand, in this weak economic setting, we want to clearly speed up our efficiency programs and double the contribution of efficiency increases compared to previous years. These are substantial cost savings that will produce CHF 80 million cost savings in 2026. CHF 80 million out of the income statement. That's an immediate effect. That is very important, and it's a strong basis for 2026, considering all the unpredictable situations we are faced with.
Not only that was part of Fast Forward, but it was also the exploitation of digital opportunities that we have done consistently. We've built up consistently. With the Fast Forward program now, we are driving this ahead to use automation and digitization within Sika and in working with our clients to drive that ahead in a setting. Construction industry certainly is not leading as far as digitization is concerned. There is an opportunity for Sika to be a leader, pioneer.
We're not only market leader, we're not only a leader of innovation, but we clearly have a claim with regard to digitalization in our market to go ahead, to be in the lead, to support our customers, generate more value for our customers, and to automate our internal processes, to use artificial intelligence to further increase our innovation capability using data scientists, supporting our traditional scientists to be faster, to be better in coming up with new innovation. As you see, the investment program has a substantial volume of CHF 120 million-CHF 150 million for the years to come. It will bring a highly appealing return on investment of below two years. I think it's a fundamental step towards the future. Back to sales in the regions.
As you can see here, the regions of EMEA and the Americas produced growth of 2.2% each in local currencies. Asia-Pacific posted a decline of 5.2%. If we took out the acquisitions in China, or in other words, the rest of Asia-Pacific would have grown by 2.5%. In other words, all markets grew, whereas in China, there is a special situation which we addressed structurally in the second half of the year. Now, we compare to markets and to competitors, and we've been doing that for many years. We're using the publicly available data on our competitors that operate in a similar setting like ours, and we have seen constant outperformance of 2%-3% when it comes to organic growth compared to our competitors.
We have two options of outperformance that we're showing here because all our major competitors are not active in China, which I think is a big drawback for them for their future, and it's a big advantage for us to be active in China. With the short-term weakness of the economy in China, of course, this had a pretty strong impact on the figures. Now, with and without China, as you can see, outperformance is significant and has been continuous irrespective of the business cycle. It's always been 2%-3%. Now, let me give you some key figures. The materials margin here is certainly remarkable. It further increased last year, and this increase is primarily attributable to us generating more value for customers, bringing more innovation to customers, and thus, customers are willing to pay higher prices.
Now, looking into the future, in the next 12 months, for instance, and the next coming years, I think this is a very healthy foundation, a basis for profitable growth of the company. Moving on to cash flow. Cash is king. In particular, when the economy is not doing all that well, cash is key, is crucial. As I mentioned already, we have 12% of operational cash flow that we delivered in the past three years, and we're committed to producing positive cash flow in 2026 along similar lines as in the previous years. Of course, the Swiss franc is not very helpful, let me say, in that regard. We need to make use of all the opportunities, all the things that can contribute that. We have shown that in various circumstances, Sika is in a position to generate that cash flow.
It's substantial, and it's a basis for our healthy investment ventures in organic growth and inorganic growth, apart from paying out a decent dividend to shareholders. It was also mentioned that safety takes high priority at Sika. This program was launched in the COVID-19 period in 2021, and we noticed that we're not market leader in safety in our industry at the time. We wanted to make sure, because we thought, well, our employees are our most important assets, so we cannot accept that result. Ever since 2021, we've seen substantial improvements in terms of safety. Safety is also a cultural issue, has become a cultural issue. It's deeply embedded in the organization. As you can see, the curve is continuously going down.
We want to drive that ahead because at the end of the day, it means that our employees can return home safely every day and do not suffer harm at Sika. We also placed considerable focus on the non-financial key figures. Our own CO2 objectives that we want to achieve, bringing them down. We're talking about Scope 1 and 2, which we have been able to reduce by 6.1%. It's also simply a question of improving on the use of water. Waste water discharge per ton sold was reduced by 3.4%, and reduction of waste disposed is also very constructive. Less waste really means less cost disposing of waste. We're not only doing something good for sustainability, for our sustainability claims, but it also has financial implications, positive financial implications. Now, moving on to acquisitions.
In the past year, we announced seven acquisitions, and six of them were completed, smaller acquisitions. As you can see in this chart, the whole world is covered by them, beginning in Singapore, where we acquired an urban greening system that is also used in Australia, in North America, in building finishing. We carried out an acquisition that is a perfect match with our existing business in England. We have a roofing business that is related to our retail business and wonderful synergies and opportunities. We carried out two transactions in the Middle East, one in Qatar, a traditional mortar and concrete admixture business. In the United Arab Emirates, a bituminous membrane, a waterproofing membrane company.
Now, these are essential extensions of our footprint in the Middle Eastern region, a booming region, certainly not at the moment, but it's being challenged at the moment. Below the line, it's one of the sustainably growing regions in the world. We also carried out two transactions in Scandinavia. I'll be coming back to them. Both of them are in the field of mortars, cement solutions. They're highly value accretive, and I'll show you or point out what the opportunities of these transactions are. Now, our own plants were further expanded, bringing them closer to the markets, the development markets that are growing lately. Southeast Asia, Central Asia, and South America, North Africa. These are markets that continue to grow, and we are growing disproportionately. We want to be close to customers with our plants, and we want to produce more locally.
Also in China, we made substantial investments. Let me emphasize that in our largest plant in Suzhou, near Shanghai, a new adhesive and sealants production plant was commissioned in the summer of last year with the objective of making adhesives available for the automotive industry. We have a three-shift operation currently and will achieve full capacity. These are additional volumes that we have generated, in particular with Chinese automakers, which is a clear proof that our presence and our innovation is appreciated by local volume producers. Now, I would like to talk about how we got started into 2026. We got off to a great start in 2026, opening five new plants in high-growth end markets, as you can clearly see here.
In particular, again, in emerging markets, the developing markets in South America, in Asia and Africa, but also in Florida. The southeast of the United States, apart from Texas, is one of the regions that is growing most heavily. It's highly appealing for us with this new plant in Orlando to serve this market. Now back to the acquisitions. Finja. Last year in December, we closed the deal with Finja, and at the beginning of February, we signed the deal, and at the beginning of February we closed it. Finja is a strong player in Scandinavia for cement products, mortar, for waterproofing, for floorings. Now Finja stands for these products, and Sika has a strong presence in Scandinavia for adhesives and sealants. In Scandinavia, we can now use the combined strength from the two categories, fully exploit them.
We can use our products, the bonding and sealing, and combine them with Finja products. Moving on to the last acquisition that we announced, the acquisition of Akkim, a leading manufacturer of adhesives and sealants in Turkey, a leading manufacturer of solutions that are strongly in demand in Turkey and the Middle East and the Far East. Again, we have more of a presence with cement and mortar, similar to Scandinavia, but with the products that we represent. Vice versa, we're supporting the local products and will be able to generate growth substantially. We expect for this transaction to close in the third quarter in 2026. As you can see, with sales of CHF 220 million, it's an essential contribution to the growth of the company. Now, I would also like to emphasize on outperformance in different market settings.
Mr. Schädler will dig deeper in the field of data centers. He will provide more insight there. Data centers are booming around the world. It's a privilege for us to have been an early adopter in the field of data centers more than 20 years ago. In the beginning, these data centers were focusing on maximizing safety, security to make sure the building shells are not disruptive for the business inside the building. Security, safety, waterproofing systems have to be top-performing products, have to be durable and enable the interior space to generate the value that we know tech companies generate. 20 years ago, that was key for us to enter this field, and it's our dominant position that we have today. Data center owners are risk-averse.
They simply want to be able to do their business and want to avoid any problems that the buildings could be making to their business. They want to run their businesses around the clock. They certainly don't want to have any water coming down through the roof. They simply want to have peace of mind. Mr. Schädler will tell you more about this. It's a strongly growing market and will be in the year or two to come. He will give you more information on that. There are the infrastructure activities. They are less dependent on the business cycle, they are more resilient, and even in times of budget restriction, they are not exposed to as much variation as housing or conventional construction.
We can see the progress of urbanization that is taking place everywhere in the world, expansion of cities in North America, in Europe, in Japan. It's going on. We have the developing markets with strongly growing mega cities. Just to give you some examples here where we're active in Germany, in São Paulo, in Brazil or New Zealand. Now, this is another field where we can show outperformance with our solutions. We are a well-known market leader able to support these gigantic projects, these large-scale projects, but also when it comes to renovation of infrastructure, we are a first choice with our products that clearly generate added value for the owners of this infrastructure. In retail trade, there are also major opportunities for us to create outperformance. This is an example from Asia, out of China.
We have a fully digitized end-to-end ecosystem from us to retailers' points of sale to users. We can fully cover that with digitally to maximize both push and pull. As you can see here, in the recent years, our POS outside China, in China in Asia were increased from 70 to 80 thousand to 160,000, and we're going as far as 300,000 points of sale in this field. On the right-hand side, you can see this produces double-digit growth increases, growth rates and will do in future. This clearly outperforms the market, and these are our components that demonstrate our outperformance in booming market, in retail markets. Let me come back to a core piece, the DNA of our company, innovation, which generates added value for customers. This is an impressive chart here.
You see we invest in innovation. Innovation does not come about overnight. We have 1,800 R&D specialists working on that on a daily basis. We are spending CHF 280 million in research and development, and they produce unique solutions that are patent-protected and that we can use in market implementation, that we can position excellently. As you can see on the right-hand side, almost a quarter of our products has been in the market for less than 5 years. These produce higher materials margins by 3%-5%. This is the added value that is appreciated by our customers who accept margins and prices. This is a core piece of our success. Let me briefly explain it with a waterproofing system, SikaProof A+, which was entered in the market several years ago. It's unique.
It's a patent-protected waterproofing system. Currently, the growth momentum exceeds 20%, and the growth curve is rather steep. We expect for this to continue along those lines. On the right-hand side, you can see the largest airport in the world, which is being constructed, the Al Maktoum International Airport in Dubai. This mega project involves more than 300 million sq m where our solution is applied there over several years. This is significant innovation that helps sales and profitability and market share. Now, let me briefly move on to an outlook for 2026. As mentioned before, we are expecting markets in 2026 to produce little tailwind. We made an assumption of negative markets to bring down our outperformance to 1%-4% sales growth in local currencies, EBITDA margin of 19.5%-20%.
Well, maybe as a sideline comment, this is a new record we're going for as far as profitability in 2026 is concerned. Certainly in the past three weeks, we've seen that this year is going to be another turbulent one. It's something we need to take into account. It's too early to tell, but with our guidance, we are still comfortable, but we will keep a close eye on whether the peace announced yesterday by Mr. Trump will come about. You know better than that and we can't believe everything. We will respond swiftly to developments. We work with our local, regional, and global supply chain partners. We have daily exchanges, and I think we will be able to champion this challenge as well. Let me also confirm our medium-term objectives as outlined in our strategy until 2028.
Now, on this, I would like to conclude and hand over to Ivo Schädler to provide more insight in data centers. It's a Rechenzentrum, the German word for data center. I never use it, but Ivo Schädler, please.
Thank you, Thomas. Dear shareholders and everybody else, it's my great pleasure to talk to you about our data center activities in more depth and give you more details on why Sika is playing such a large role in this market segment and why it's so important for us and also offers great opportunities. You might have already seen in the Sika magazine that was offered as part of the annual report. There was an article in there that I would encourage you to take home and peruse. It tells you more about all these attractive vertical markets. One thing that's for sure, in my opinion, is that AI is the driving force, something we all deal with.
We're using all the different bots. We also use systems to download, to upload, to use other data systems. Sometimes people think the cloud is just floating around somewhere, but of course, these are massive amounts of data that need to be somehow managed and housed. You need a very large infrastructure for that, which also consumes a lot of energy. These data centers by now, together with water, electricity, gas, and telecommunication, are the so-called fifth utility already. This is not something that's only happening. It's here to stay, we believe, and it's growing dramatically. You might have heard from us before already. We follow the money, and this is definitely one area where we can do a lot of business.
Look at these figures here. Maybe we were talking previously more about the construction investments, but these are the overall investments. We're talking about billions here. These are figures from so-called GlobalData Plc that we use. And as I already mentioned, whoever runs these data centers, they have very high costs. These big tech companies, but also specialized companies, they need a very high value building envelope to protect their service. Also, of course, the demand for electricity is constantly increasing. As the owner of such a data center, what are the risks that we need to help them deal with and to give them peace of mind, as Mr. Hasler said previously? We are helping them protect their assets.
A data center means an investment of CHF 100 million-CHF 300 million, 60%-70% of which is the IT equipment and all the equipment. We've been in this market for over 20 years. That is very important because we have a very good track record for reliability, and that is a central pillar of what makes us special. Of course, we also want to help them construct as rapidly as possible, also with simple solutions. Energy costs are immense, as I already mentioned, but we can also help to reduce them somewhat and become more carbon efficient, not only for the construction itself, but also for the whole life cycle of the entire plant. It's a very global market.
The large tech firms are active worldwide. That is actually handy for us. A lot of them started out in the U.S. or Ireland or some other locations, but we are actually very well equipped with our international experience and our many subsidiaries to directly make sure that the know-how required is available in that particular place. First of all, what is important here? Speed of construction. What is the demand for data? There's an endless appetite for data, it seems, so we can't even build them as fast as it increases. We look for standardized solutions to reduce costs and accelerate delivery. Thanks to all these various markets and product groups that we cover, we can offer really great comprehensive solutions. Sustainability, as I already mentioned before.
It's not about only CO2 emissions as such, but also when we use material that have a longer durability and life expectancy, of course, that is also in itself more sustainable and will ultimately result in less CO2 consumed. Anybody who is running such a plant doesn't really want too much to do with the building itself and they want as little maintenance as possible, and this is why we offer these long-life solutions. You already saw this briefly during Mr. Hasler's presentation. We are active in roofing, solar roof solutions, then the whole foundation, the flooring, waterproofing, and passive fire protection. Maybe I'll go into more detail here. Talking about roofing as a target market. Durability, longevity is important.
We use a lot of recycled material, and we also have so-called self-healing sealing foils, waterproofing foils. If there is any kind of a tear in the foil, it can actually close it itself. This is a very good thing, and we can also certify Cradle to Cradle recyclability. Finally, we can help reduce costs. The concrete envelope itself. Here we increasingly use fibers to replace steel reinforcement. You might be familiar with the process from construction sites. You always see how they put in all these steel girders and then add the concrete, and now the fiber can just be added directly into the concrete and poured. It's a much simpler process.
It will eventually have many other positive effects for sustainability and costs. We don't want any water coming in from above, but certainly not from below either. It's important that we have high-value flooring systems. Here we also have very innovative systems that will have the additional virtue of being very quickly installed. Sarnafil® AT is a product that we've had on the market for a few years for long life expectancy combined with high sustainability and is already tried and true in many projects. In flooring, we have, in the data centers, mainly cement floors that are actually also aesthetically quite adequate. Of course, we don't need to additionally coat them.
Once again, w e can help reduce the entire construction time for a flooring system 80% quicker in some cases even, and that again lowers the CO2 footprint. Patented value-adding innovations. I already mentioned these self-healing membranes for flat roofs. There's no need for repair or much less, and we can prevent water damage, any damage to the infrastructure. These fibers that you see here are plastic fibers that are an alternative to steel mesh. Once again, besides saving costs in terms of work time, it is also very positive in terms of sustainability. Other systems. Of course we have our range of products, but it's not just individual products. They always work together.
There's always a combination of products that help us offer a solution to the constructors. We're talking about joint sealants, fire protection, applied membranes, and joints. Here you see some very well-known clients along with the specialist companies that operate these data centers, but also very important partner companies. There we really want to have an early start on the project and to be able to specify our solutions. There we really are able to stand out from the competition. Maybe a few points here, how we manage to really gain a good market position and to keep expanding it. First of all, we differentiate ourselves. That is attractive for any clients. Already early in the design phase, we are involved and can contribute to efficiency.
The specifications, the tenders, here we are, once again, present from the beginning. Another important point is, of course, track record and experience. Not many have as much experience as we do in this particular market segment. Comprehensive solutions. It's a combination not just of a few products, but really a quite wide range of products and that support each other and improve the function and guarantee it. Sustainability. We have building standards, certificates, and so on, LEED certificates. We have had all our products certified and tested, needless to say. Finally, international collaboration. Just to mention it again, we have an international team that I also supervise that really takes care of these international clients.
In good harmony and cooperation with our local representatives, we can be sure that some of you might know construction sites. You know that things are not always that efficient there or can easily become very complicated. It's great to be present there onsite, close to the customer. A few more information and examples in Switzerland. We are in Switzerland here and also here a lot of data centers are being built. This year, no less than 11 across the country, where Sika is involved with its comprehensive solutions. It's not just somewhere far away in the U.S. or elsewhere in Europe. There are more and more of these centers in Switzerland. They look like this one, for example.
The companies don't always want us to disclose their names. There is confidentiality involved. We have some images of data centers here. With that, I thank you for your kind attention.
[Non-English content]. Dear Thomas, dear Ivo, thank you for your presentations. It was a very wild year. If you see a new data center, you'll know where it comes from, and who made it possible. It was us with our Sika materials. Back to agenda item one. The annual financial statements was checked by KPMG. You will find the details on pages 262-264, and 281-283 of the annual report.
KPMG therein recommends to approve the financial statements and the consolidated financial statements for the year 2025. To the actual agenda item 1. 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 2025 be approved. I will now open the floor for any contributions. Does anybody wish to speak? We can immediately proceed to the vote. We already practiced before. Please take out your voting device and press the appropriate button to cast your vote. The vote on agenda item 1 is now open. The vote is closed, and you will see the result in a few moments. There we are.
You have approved the annual financial statements and the consolidated financial statements for the year 2025, and they are therefore approved. Thank you. Agenda item two: Appropriation of available earnings and repayment of reserves from capital contribution of Sika AG. The Board of Directors proposes that a distribution of in total amounting to CHF 3.7 per share be made. For this, CHF 1.85 are to be distributed from available earnings and another CHF 1.85 from reserves from capital contributions as follows. As you were already able to glean from the invite to this year's. These two items will be voted on separately. The electronic voting system allows us to carry them out in immediate sequence and then present the overall votes after the second vote or the last vote.
You have seen explanations of these agenda items in the annual report on page 280. The auditors have confirmed that this is all in accordance with our articles of association and the law. Does anybody wish to speak on this topic? I don't see any requests. Apparently somebody did want to speak on agenda item one and didn't actually come forward. Thomas Hasler. Would you like to say something? No? The interpreter can unfortunately not hear what the gentleman is saying. Well, I would invite you to go to the desk and register yourself as a speaker.
Ladies and gentlemen, dear shareholders, team Sika, welcome, and thank you for giving me the opportunity to speak 2 minutes, 53 seconds to all of you. I'd like to start with an anecdote. All I would like to say first is that everything I have heard in all these details, I can't find any hair in the soup, and, as far as I'm concerned, it all makes perfect sense. I am a positive shareholder, and I appreciate what Sika has done in the past couple of years, and I remember that a few years ago, I was in Urdorf at the headquarters, and there was a barometer showing CHF 4 billion. That was the revenue of that year. Next to it was the Everest with CHF 1.8 billion, and the goal was to achieve that within a few years. Thank you.
Thank you that you managed to make all of this work out, and all these acquisitions in 2022. From an integration point of view, that all of this went very smoothly. The point is, everything we've seen, of course, impacts all Swiss companies the same way. We have benchmarks. We know what the figures there are. We know what the geopolitical situation is. We know about the Swiss franc. Of course, this is something that all Swiss companies are facing currently. Something I couldn't help think about, it would have been nice to see how other companies in the same industry, maybe not exactly competitors, but others in cement and so on, deal with topics such as carbon footprints, with sustainability, for example, Holcim.
Because I'm a long-term shareholder, and from 2023 onwards, and 2024, my old love, Sika, went down rather than up when others were adding 50%. There was a 50% decrease in the share price. I don't know where this dip came from. Maybe a few points. Maybe the communication wasn't good. Is communication with influencers good? Are you rated the right way? And isn't Sika supposed to be a solid Swiss company? What are the costs? Are they reasonable compared? Are they in balance, you know, compared to the earnings?
Another thing I have to think about, are you really making use of your pricing options when you look at the competition and your competitive position, which I'm sure is not untrue, but then take a look what Geberit does with their prices. I don't see the same thing with Sika. I don't see any efficiency apart from data centers. No increase in efficiency, no target for the next five years. This is something that's missing. Even if it wouldn't contribute directly to overall growth, it's very important for the overall picture. I thought we'd reached rock bottom now, but we need to start going up with the share price again. Somewhere, we're missing the push and the dedication, professionalism, the necessary mindset to really change that trend around and turn it around.
Thank you for your contribution. I will answer it in my Rudi Carrell German. Please forgive me for that. I'm sure, and I assure you that the irritation about the share price in 2025 is something that we share with you. All of us here are also shareholders, I would remind you. Everybody on that stage has also been impacted and is aware of what a major impact that was. The questions you are asking is questions we have to ask ourselves on a daily basis. The company management, of course, is doing everything they can. It's annoying, but on the long term, I do believe that Sika is intact. We have been able to gain market shares, maybe more than others.
We were hit by what happened in China. Together with the entire board, I'm very happy that we didn't try to hide this away or look for artificial solutions. Sometimes you have to stay down to earth and take responsibility and say, the Chinese business was a jewel in the crown for us and is a huge machine for the entire Asian market. Unfortunately, in 2025, it was a strange year, let's call it like that, where the main markets were not progressing. The questions you were asking us is, as I said, questions that the whole management deals with. Okay, I'm not sure I agree that there was no productivity.
We have plenty of examples where we made a lot of progress, but geopolitically in the last year, and macro and microeconomically, there were unpredictable events that had a massive influence. The whole team at Sika is disappointed how things went for us with relation to the share price, and we see it as a motivation to do even better than previously. Thank you for your contribution. Agenda item two. We will do both of these proposals separately. As I mentioned, they are asking for CHF 3.70 divided into two parts. From available earnings and another from reserves from capital contributions. Can I ask, does anybody wish to speak on this? If not, we will progress with the vote, but I will not read out the proposals in sequence.
I would ask you to bring out your voting device now for agenda item or for the appropriate item. We start with appropriation of available earnings, and this vote is now open. 2.2 repayment of reserves from capital contribution starts now. The voting has closed now, and we will await the results. You see the results for both agenda items, and you have both approved them with a large majority. Thank you very much.
Item 3: granting discharge to the administrative bodies. The Board of Directors proposes that the responsible members of the administrative bodies be discharged. We're going to vote collectively on discharge of the Board of Directors. Before we proceed to the vote, I would like to note that pursuant to Article 695, the Swiss Code of Obligations, all persons who've been involved in the management of the company in any way are not entitled to vote on this agenda item, nor are persons entitled to vote who represent the shares, share votes of persons who have been involved in the management of the company. Anyone requesting the floor on this item? Not the case. I would like to ask you to take your voting devices and press the appropriate button to cast your vote. The vote on item 3 is on now.
Voting time is over, and the results will appear on the screen shortly. I herewith note that you have granted discharge to the members of the administrative bodies. Thank you very much. Item 4: elections. We begin with Item 4.1 reelection of the Board of Directors. As provided in our Articles of Association, we elect all members of the Board of Directors individually and for a term of office of 1 year, that is until completion of the next Annual General Meeting. Again, we will conduct the elections for all candidates one after the other and present the aggregate election results to you after the final round. As can be seen from the invitation, the current members of the Board of Directors listed on the screen behind me are standing for reelection. They are all supported by the Board of Directors.
Unfortunately, Mr. Paul Schuler has decided not to stand for reelection. We will bid farewell to him at the end of the meeting and pay tribute to his great services to Sika. Anyone requesting the floor on this item of reelection of the members of the board of directors? Yeah. The interpreters can't hear the comment. Well, could the members of the board of directors raise for a minute? Good exercise. You will see nice pictures in a minute. No one else requesting the floor? Anyone else? Mr. Mark Bossard from Zug.
Mr. Chairman, members of the board of directors and the group management, dear shareholders. My name, as was said, is Mark Bossard from Oerlikon. We have an office in Zug. I represent Sika shares of the SaraSelect Fund, which has been investing for more than 25 years in Sika out of deep conviction. In the takeover battle with Saint-Gobain, we took the side of the strong management and against the irresponsible family, Schenker-Winkler. Thank you. If we consider absolute and relative performance of the Sika stock over the past 1.5 years, there are certain questions arising.
If you look at the composition of the Board of Directors, including the newly suggested members, you will notice, especially now that Paul Hälg has left and that Paul Schuler is leaving, two tried and tested battle horses, one takes note of the following five points. First of all, the spirit that was there a few years ago, which saved the company not only from the unfriendly takeover by Saint-Gobain, but provided a lot of momentum, is missing to some extent, at least as far as I'm concerned. Secondly, there are too many representatives of the services and the financial industry who are not very familiar with the construction industry or representatives of investors that are no longer there, like Justin Howell from Cascade.
Thirdly, we have a chairman of the board who is heavily challenged as the CEO of the Aliaxis Group. They had a profit decrease of 79% and probably does not have the necessary time to devote to Sika. He lives in Belgium. Unfortunately, Aliaxis is closer to him probably than Sika in Switzerland. Fourthly, in the year of crisis, in 2025, there were only seven meetings of the board of directors, and in standard years before, the number of meetings of the board of directors was 10-12 per annum, almost double the figure. Fifthly, at 3.75 years, the average holding period or staying period on the board of directors is relatively short. Still, Sika is a rather complex business.
As a general rule, a member of the board of directors takes at least one to two years to be able to generate value. In the years before, we had people staying for six years on average, and this is really in contrast to the group management, where we have an excellent representation of the long-term factor. We ask ourselves whether some of the current candidates and the newly proposed candidates, or even the current Chairman of the Board, Thierry Vanlancker, are truly the right persons to provide the impetus in the face of a challenging market and to consistently support the group management. We would suggest not to reelect Thierry Vanlancker and Gordana Landen and Justin Howell, not to reelect them as a, as members of the board of directors, and would wish for more representatives for the industry.
We want to have a more Swiss, a more dynamic Sika, the way we knew it before and the way it was highly successful in global competition. Thank you very much.
Thank you for your statement. Well, we know what you are going to vote on, but maybe we can have a chat about that in person. Anyone else who requests the floor on this item? Let me propose to begin with the elections. The Board of Directors proposes, pursuant to items 411 to 417, the reelection of Thierry Vanlancker, Viktor Balli, Lucrèce Foufopoulos-De Ridder, Justin Howell, Gordana Landen, Thomas Aebischer, and Frankie Ng to the Board of Directors for a term of one year each.
I would now like to ask you to take your voting devices and cast your vote on the respective proposal of the Board of Directors by pressing the corresponding button. As mentioned, I will now put each reelection to the vote in turn. We will then present the results of the individual votes to you in their entirety after the final vote. Moving on to reelection of myself, 4.1.1. The floor is open. The vote is open. Please cast your vote. The vote is closed. Next, we have the vote on reelection of Viktor Balli. The vote on item 4.1.2 is on. Please cast your vote. Voting time is up. Next vote, the vote on reelection of Lucrèce Foufopoulos-De Ridder. The vote on 4.1.3 is on. Please cast your vote. Time is up. Vote is closed. Moving on to reelection of Justin Howell.
The vote on item 414 is open. Please cast your vote. Time is up. Moving on to the vote on re-election of Gordana Landen. The vote on item 4.15 is open. Please cast your vote. The vote is closed. Moving on to the vote on re-election of Thomas Aebischer. The vote on item 4.16 is open now. Please cast your vote. The vote is closed. Moving on finally to the vote on re-election of Frankie Ng. The vote on item 4.17 is on. Please cast your vote. The vote is closed. Bear with me until we can see the results. You have re-elected all candidates proposed at vast majorities. I congratulate my colleagues on re-election. I would like to thank you for your trust. That brings us to agenda item 4.2, elections to the board of directors.
The board of directors proposes the following persons be elected to the board of directors: Barbara Frei and Lukas Gähwiler. The board of directors is convinced that due to their long years of experience they can support the board as valuable members. Let's begin with 4.2.1. Barbara Frei is an internationally experienced leader who has led large, complex organizations in global industrial corporations. In her most recent position, she served as Executive Vice President, Industrial Automation, and member of the executive committee of Schneider Electric. Barbara Frei will contribute with her deep technical and digital expertise, combined with strategic leadership skills and extensive experience in global markets to the board of directors. Barbara Frei is considered independent in accordance with the Swiss Code of Best Practice for Corporate Governance of economiesuisse.
This is also an effort of Sika to raise the percentage of women represented in the board of directors. Barbara, may I ask you to present yourself?
Yeah. Hello, Thierry. Have to put the mic down a little bit. Introduction time. Dear shareholders. Ladies and gentlemen, it's a great honor to be before you here as a candidate for the board of directors of Sika. It's been more than 30 years that I've been working at the interface of industrial technology, engineering and operations, and accompany teams through complex processes and transformations, as Thierry mentioned. Maybe new applications and markets had to be explored, or the service business had to be accelerated.
New disruptive platforms were introduced, and then other topics were portfolio management, which could mean acquisitions or divestments. During my career, I had the privilege of working in different regions and markets, which also gave me an understanding of what it takes to build up companies that not only are economically successful, but also resilient and, in other words, fit for the future. What really brought me to Sika? When I look at Sika, I see an extraordinary company. In the past 10 years, Sika showed a rare capability to keep growing continuously, to keep innovating and implement all of that in a very disciplined manner with a very clear attitude and strong sense of purpose. Sustainable solutions that have also contributed to efficiency in the whole sector.
It was a nice description before about these data centers, how all the different Sika solutions work together. The decentralized model and the long-term outlook are also characteristics that I really appreciate about Sika. The goals of the 2028 Strategy Beyond Expectations are, I think this is something that was mentioned several times, that we're in times where every day we're faced with new political realities, are a challenge but are also an inspiration, and I would love to be part of that journey. A board is only as strong, which we also heard as criticism, as the many perspectives that can be represented there, and different attitudes and mentalities. I am sure that I can bring something to the table which is completely in line with the priorities of Sika.
Firstly, I have a depth of experience in operations and in industry. I am familiar with worldwide complex corporations. I know how value creation works on a local level and in direct contact with clients. Also as a board member, I'm able to ask the right questions to ensure that strategies are implemented in an efficient manner. A second topic is digital transformation and technology. Integration of digital tools is no longer science fiction, already for a while not. In an industrial company, it's a decisive competitive advantage. I have practical experience in that area from my professional life and my client relationships. Thirdly, a very strong commitment to sustainability. That has always been the case as well, both for ABB and Schneider Electric, this was always a very important topic.
Of course, the transformation of the own company to a more sustainable method is always central, whether it's about talent development or new business models. Looking at the ambitious ESG goals of Sika, I'm sure my experience can be brought in very productively. Finally, I have an independent capability of assessing situations. That's a very important aspect of a board member. You have to be able to respectfully question decisions and always try and act in the interest of the company and its shareholders, and I'm aware of that responsibility. Dear shareholders, if you give me your confidence today, I will commit myself to bring in my experience, my energy, of which I have plenty, and my creativity and integrity into this board. To be well prepared, to be present, and to speak openly.
The long-term success of Sika is something I want to support and ensure that the interests of all stakeholders, be they shareholders, employees, clients, or society as a whole, are fully taken into account, is one of my key topics. Sika is a very big success story, a Swiss success story that I would be very happy to be part of. Thank you. [Non-English content ].
Thank you, Barbara. As you are also able to see from the invitation, the board has also proposed the election of Lukas Gähwiler. He has been the Vice Chairman of the board of UBS Group since 2022. Previously, he was Chairman of the board of UBS Switzerland and a member of the Group Executive Board of UBS Group, as well as President of UBS Switzerland.
Prior to joining UBS, Lukas Gähwiler held various leadership positions at Crédit Suisse for more than 20 years, mainly in corporate financing. He brings extensive leadership and industry experience across all areas of finance and banking, as well as a strong institutional and political network. Lukas Gähwiler is considered independent in accordance with the Swiss Code of Best Practice for Corporate Governance of economiesuisse. I would now invite Mr. Gähwiler to join us on stage and introduce himself.
[Non-English content]. Thank you, dear Chairman. I'm a finance expert. I hope that I would be able to prove that someday. Dear shareholders, I would like to briefly give you an overview of my career. You might have noticed from my accent, I come from Eastern Switzerland. I started with a bank apprenticeship, and after studying at the University of Applied Sciences in St. Gallen in 1990, I started at what was then Schweizerische Kreditanstalt, later CS. In the later years, I had various stations that brought me abroad, mainly to Canada and the U.S., and always with a focus on corporate financing. This international activity has widened my perspective on different markets, cultures, and corporate cultures.
In 2003, I was given responsibility for the worldwide credit business of Credit Suisse private banking, particularly the Swiss credit business here. In 2010, went to UBS in the years after the financial crisis, where I was active in all different types of customer bases, corporate, private, and asset management, and had leadership responsibility for more than 20,000 employees there. I was able to assume the Chairmanship of the Board at UBS, the Vice Chairmanship at UBS Group. When Credit Suisse got taken over by UBS a few years ago, I was able to coordinate the integration process of Credit Suisse into UBS and monitor it.
As we all know, this was a successful concluded operation, including transferring all the account holders to UBS. Thinking back, I realize there was always two aspects that were especially important and inspiring to me. First, cooperation with people. I saw it as a great privilege to be working with all kinds of different personalities with very interesting backgrounds, different cultures, and different geographic origins, and also of course, with clients, with customers, with fellow employees and business partners to formulate common goals to successfully implement them sometimes with several generations. For me, this was always a central aspect. In that respect, the corporate culture at Sika has always especially impressed me.
The strong sense of identity, long-term thinking, and the core values, in my opinion, are important success factors for this company. I would be very pleased to be able to contribute to the further development of this culture as a member of the board, so development of the culture, but also the people working there, of course. Aspect number two that always motivate me was a very comprehensive view of the business world. For years, I had the possibility to meet all kinds of different companies from the most different, markets and regions, which gave me a deeper understanding of the various challenges, decisions, and sustainable value creation. It was particularly, this that interested me when I became familiar with Sika in a phase where it showed great, tenacity and strategy in fighting for its own independence.
As a bank partner, I was able to follow this development from an external perspective, but also accompany it to an extent. I have great respect how successful Sika was able to keep developing. Today, I am particularly interested in the possibility of changing sides from banking to industry, and thereby bring in my experiences in talent development, leadership, strategy, corporate governance, and really apply it even more directly. My role in the board of directors, in my opinion, has the goal of accompanying the development of the company in the long haul while assuring that there is responsible oversight. Privately, I have been married for over 30 years with a Swiss Canadian wife. We have 3 grown-up children. I love being outside in all kinds of different sports.
Of course, it's handy that I live in central Switzerland for that. Thank you very much, and I thank you for your trust.
Thank you, Mr. Gähwiler, Lukas, for your presentation. Let's move on with the proposal. The board of directors proposes, pursuant to items 421 and 422, the election of Barbara Frei and Lukas Gähwiler to the board of directors for a term of one year each. Anyone requesting the floor on this item? Just you. Yep, okay.
Yes, please. Ladies and gentlemen, I'm Max Endeley from Hagenwil. Sika is very dear to me, close to my heart. The battle at the time versus Saint-Gobain, versus the family for Sika to remain independent, that was very important. I'm somewhat disappointed now that Mr. Bossard has spoken here. Now, what's the use of a board of directors, ladies and gentlemen? The board of directors who don't meet, who don't sit together in crucial phases. The stock price is more than 50% down. We have a volume of CHF 20 billion. We used to have CHF 40 billion and more, and Mr. Vanlancker says. Oh, didn't even respond to what Mr. Boss had said. I was disappointed with that. Mr.
Vanlancker, if you as the Chairman of the Board, you have to stand up in times of crisis and perhaps travel to Switzerland a few times more and meet with the other members of the Board of Directors. The members of the Board of Directors have to contribute their knowledge, and if you don't meet, then there's no use of the members of the Board of Directors twiddling their thumbs at home. Now, I call upon you. I know you had a lot of work at home, but if you take up the office of Chairman of the Board, I expect that you stand up in periods of crisis and maybe work for more than 12 hours a day. That's what you're being paid for.
I'm not absolutely certain whether I have understood everything specifically, but if I got you right, you said that I only work half time or less than 12 hours a day. Well, that's not true. You're saying that the board of directors are not interested and do not do their work. This is nothing to do with the facts. It's just creating a mood here. The board of directors had their meetings, so I don't agree at all. It's not based on facts at all. The members sitting here invest a lot of time in meetings and using AI, and at some point you have to look at the results produced in the company. I share your irritation about the stock price. To say that the Board of Directors does not do their work, I cannot accept that. Thank you very much.
Thank you. Unless there's someone else requesting the floor, we were about to vote on people proposed to join the Board of Directors. Please cast your vote on the Board's proposals. We are going to vote separately on the candidates, and the results will then be announced collectively. Moving on to the election of Barbara Frei as a member of the Board of Directors. The vote on 4.2.1 is open. Please cast your vote. The vote is closed. Finally, we're going to vote on the election of Lukas Gähwiler as a member of the Board of Directors. The vote on 4.2.2 is on. Please cast your vote. The vote is now closed. Waiting for the results. Bear with me.
You have elected the candidates proposed by the board of directors and vast majorities. I congratulate very cordially Barbara Frei and Lukas Gähwiler on their election. I wish you best of luck. Moving on to item 4.3, election of the chairman of the board. The board's proposal is to reelect Thierry as chairman of the board of directors. The floor is open for a debate. Anyone requesting the floor? Doesn't seem to be the case. I would like to ask you to take your voting device and press the appropriate button to cast the vote. Voting time on an election of the chairman is open. Voting time is up. We shall see the results in a minute. You have reelected me as chairman of the board, and I would like to thank you for your trust.
We continue with agenda item 4.4, elections to the Nomination and Compensation Committees. As proposed by our Articles of Association, the General Assembly also elects these members from the board. The members of these committees will be voted individually and for the duration of one year until the following annual general meeting. Again, here there will be individual votes or elections, and then the results will be presented in aggregate after the last election. Paul Schuler is no longer available for the Nomination and Compensation Committee. Therefore, only two of the previous members are standing for election, re-election, and Lukas Gähwiler has made himself available to be elected. Does anybody wish to speak on this agenda item? It would appear not. Therefore, we proceed to the vote.
The Board of Directors for agenda items 4.41 to 4.03 proposes the election of the following, the three persons mentioned below to the Nomination and Compensation Committee for a term of office of one year. I would now ask you to take out your voting device and cast your vote to each respective election. We start with the re-election of Justin Howell. 4.41 is the agenda item and voting starts now. Voting is closed. Next, re-election of Gordana Landen. 4.42. Voting starts now. Voting is closed here. We now come to the vote on the election of Lukas Gähwiler. 4.43. Voting starts now. The vote is completed. We await the results. You have elected Justin Howell, Gordana Landen, and Lukas Gähwiler with a great majority to the Nomination and Compensation Committee.
We thank you for your trust and congratulate all our colleagues. Next, 4.5: election of the statutory auditors. The Board of Directors proposes to elect KPMG AG as auditors for the business year or the financial year 2026. We have been informed by the representatives of the company that they would be glad to continue in this role if they are appointed by the assembly. Does anybody wish to speak? I would appear not. Please use your voting device and cast your vote. Agenda item 4.5. Voting starts now. Voting is closed. The results will appear in a moment. You have appointed KPMG as the statutory auditors also for the year 2026. Congratulations. 4.6: election of the independent proxy. Board of Directors also here, this is up for election.
The board of directors proposes Mr. Jost Windlin, attorney at law and notary at Bright Law AG in Zug, as the independent proxy, for the duration of a year until the next annual general meeting. Does anybody wish to speak on that item? Okay. Would you please take out your voting device and cast your vote? Item 46 is now open for vote. Voting is closed. We will see the results in a moment. Here is the result. You have elected Mr. Jost Windlin as independent proxy with a large majority. Congratulations, Mr. Windlin. 5: Approval of the sustainability report. Sika AG is obliged to submit the sustainability report to the annual general meeting for approval. The details are also included in the invite for today's AGM.
The sustainability report can be found on pages 38-174 in the annual report. The Board of Directors proposes to approve the sustainability report 2025.
Does anybody wish to speak on this agenda item? I'm sure you have read the whole report. Good. Let's proceed then. Please pick up your voting device and press the appropriate button. Voting on agenda item 5 starts now. The [Non-English content ]. Here is the exact result. You have approved the Sustainability Report 2025, greatly so even. Thank you. Item 6, compensation. Let's begin with item 6.1: advisory vote on the 2025 compensation report. The 2025 compensation report sets out the compensation systems for the Board of Directors and the Group Management, as well as the compensation paid to the members of both parties for the reporting year. Compensation report can be found on pages 194 to 215 of the Annual Report.
The compensation of the Board of Directors comprises a basic fee for work on the Board of Directors and additional compensation for participation in the board committees. The Chairman of the Board of Directors also receives a representation allowance. The compensation model for the Group Management consists of fixed and variable compensation. The variable compensation comprises an annual performance bonus and a long-term share plan, with both variable compensation components being dependent on the achievement of ambitious goals and subject to caps. You can now see the compensation actually paid out for the 2025 financial year. For the Board of Directors, this amounts to CHF 3.2 million, which falls within the maximum total compensation approved by the general meeting.
For the group management, it amounts to CHF 16.4 million, which is below the limit of CHF 23 million approved by the general meeting. The board's proposal is that the 2025 compensation report be approved in a non-binding consultative vote. Anyone who wishes to speak on this item? Not the case. Let's take your voting device and press the appropriate button to cast the vote. The vote on item 6.1 is open. [Non-English content ]. Voting time is up. Let's wait for the precise results. Here they are. You have approved the 2025 compensation report. Thank you very much. Moving on to item 6.2: approval of future compensation for the board of directors.
The Board of Directors proposes a maximum total amount of CHF 3.7 million for the 9 members of the Board of Directors from the period from the 2026 Annual General Meeting to the 2027 Annual General Meeting. The details are displayed on the screen behind me. The amount is broken down as follows, CHF 1.7 million for cash compensation, CHF 1.75 million for share-based compensation, and CHF 200,000 for social security contributions. Compensation structure remains unchanged from the previous compensation period. The proposed maximum compensation amount is higher than in the previous year because the Board of Directors now comprises 9 members compared to 8 members in the previous year.
With nine members, the board of directors is back to its former size, which provides more flexibility in making appointments for the board committees and is below the sizes of administrative bodies or boards of directors of comparable companies. The board of directors proposes the approval of the total compensation for the board of directors, consisting of nine members of a maximum of CHF 3.7 million for a term of office of one year until completion of the next annual general meeting. Anyone requesting the floor on this item? If not, I would like to ask you to take your voting device and press the appropriate button to cast your vote. Vote on item 6.2 is now open. Voting time is up. Bear with me for the results. You have approved the future compensation for the board of directors. Thank you very much.
Moving on with 6.3, approval of the future compensation for the group management, and I would like to make some additional comments on that. The total amount proposed for the 2027 financial year remains unchanged compared with the total amount approved for the 2026 financial year. The proposed total is expected to comprise CHF 8.6 million for fixed compensation, CHF 10.7 million for the performance bonus. The actual payment will be made in 2028, and CHF 6.7 million for allocation of rights to Sika shares under the long-term share ownership plan for the performance period from 2027 to 2029. Actual payment in shares will take place in 2030.
I'd like to point out that this is a maximum amount for more than half of the proposed sum that is for the performance bonus and the long-term share ownership plan. Actual payout depends on the achievement of targets. Past experience shows, as you have seen, that we set ourselves ambitious targets. Now, moving on to the proposal. The Board of Directors proposes approval of the total compensation for the Group Management, consisting of 8 members, of a maximum of CHF 26 million for the 2027 financial year. Anyone requesting the floor to speak on this item? I don't think there is anyone, so please take your voting device and press the appropriate button to cast your vote. Voting time is on now on 6.3. Time is up. Waiting for the results to be shown on the screen.
You have approved the future compensation for the Group Management. I would like to thank you for it. As we have mentioned already, Paul Schuler has decided not to stand for re-election. After more than 40 years of work in the industry and almost as long at Sika, including a stint as CEO from 2017 to 2021, Paul leaves behind a significant legacy. His deep understanding of markets, technologies, and products, as well as his very strong commitment to Sika's values, have shaped the company's development over many years. The Board of Directors would like to express its sincere gratitude to him for his exceptional commitment and his long-standing great contribution to this company. I would like to hand over to Viktor Balli, who will pay tribute to Paul Schuler's achievements from the perspective of the Board of Directors. Viktor, please.
Thank you, Thierry. Dear shareholders, dear colleagues, dear employees of Sika, dear Paul. Hello. I'm very pleased to be able to say a few words as a farewell for Paul Schuler from the board of directors. I know that I don't need to present Paul to this audience because he was on this podium for many years. A lot of people in this hall have known him for many years and perhaps a lot better than I know him. Yet, or because of that, he deserves recognition and gratitude. Paul Schuler has had a conventional industrial career. He started off as a product manager for technical products with MBCC and other companies. In 1988, at the age of 33, he moved on to Sika. At the time, Sika had sales of CHF 725 million, which we do in three weeks today.
He remained loyal to this company until this day, no less than 38 years. It's an incredibly long time and a show of loyalty, endurance, and a deep connection. Paul started off as head sales industry in Switzerland, and he was enthusiastic as early as that for especially working in front-end activities, commercial activities, customer relationships. These skills and his leadership were recognized rapidly, and after only five years, he became general manager of Sika in Germany, a company, an important company in the group. In 2007, he took on the responsibility for the important region of North America and became a member of the corporate management, the group management. For 15 years, he was an essential member there. From 2013, heading the largest region of EMEA, and from 2017, he was our group CEO.
In the five years at the helm of Sika, he led Sika to new heights. Sales grew by 50%, Sika's stock price tripled, and he initiated two significant acquisitions. The number of employees went from 18,000 to 27,000. What a performance. Of course, due to his team as well, but after stepping down, he became a member of the board of directors from which he is stepping down today. Just as important as this impressive career is Paul as a person, as a private person. I would like to say a few words that are a perfect match with him. Leadership. Paul is a natural born leader. He does not shun responsibility. Based on his sound knowledge and great technical skills, he was able to challenge people and promote people.
It was impressive to see how he always knew when to intervene and when to trust his people and delegate work to them. If somebody had a different opinion, a dissenting opinion, he often gave a chance to this person, telling them to prove that he was wrong. Paul had a vision, but also was very pragmatic. He always wanted to grow, to be better, to be successful without forgetting his people. He was a role model for many of us. Next concept is energy. I never experienced Paul as tired. He was always looking forward, a doer. His energy was addictive, and I can only guess how many times he circled the world in an airplane. I know how inspiring that is, but I also know how tiring it is. He was always focused in all the meetings, driven by the objectives.
A people person, next. Have you ever traveled to a Sika venue or Sika location with Paul? He knows everyone, and they all know him. They approach him, and he calls them by their names, which goes to show the trust that he deserves and he earns and how approachable he is. He takes care of his people. He is interested in them. Apart from business, there's always time for some personal words. He promoted a lot of talent, a lot of people in important functions with Sika today. Modesty or humbleness is a better word than modesty.
Celebrity CEOs. There are the self-centered celebrity CEOs we all know, and there are the ones who are not always self-centered and not always in the limelight, do not always have to be in the limelight. Paul always focused on the company and on the team. They were more important than his own person. He is down to earth and always authentic, and that's why he's highly credible. Now, with these properties, he practiced the Sika spirit throughout all the years. Dear Paul, you were brilliant with your knowledge on Sika, on the board of directors and products and markets. We always relied on your advice, but you were also a good listener and allowed for dissenting opinions. You were always focusing on the well-being of the company.
You were a good colleague and a team player, and we always had fun with you and talked with you about sports in general and motorcycle tours. In management positions, also generally in life, there are moments when you take leave. Now we are bidding farewell to you, and that creates space for new things, new people, new ideas, and that's the natural cycle of life, even on a board of directors. A farewell is always a new beginning also for you. On behalf of the board of directors and certainly of all people assembled here in this hall, I would like to very cordially thank you for your heart for Sika, your great commitment. We will miss you. I will miss you, and I'm certain we will meet again. Wish you all the best for the future, dear Paul, and stay safe and healthy first and foremost.
Well, we had to convince Paul to come up on stage. He wanted to do it in his own style and not appear, but unfortunately.
Well, thank you very much. I won't keep you for very long. It was a wonderful time. Throughout the years, we grew considerably. We grew from CHF 900 million to CHF 12 billion. We broke many records. We made a difference, which was exciting. It was always important for me to do that with our people around the world, with all the projects and all these sales can only be achieved with our people. To achieve that with the people, that was really the source of joy.
I wish Sika that this spirit, this drive will be kept up, to keep Sika successful. Now, of course, as a shareholder, I'm as unhappy as you are. We lost a lot of money. You certainly saw how many shares I have. I think there's no reason, however, that Sika couldn't go back to its growth course. We've got everything. We've got the best products. We are committed. We are working against a headwind, but I'm convinced we're going to make it. Sika is going to make it. No doubt about it. I wish the management and the Board of Directors a lot of courage and a lot of luck in difficult periods of time. It's going to be difficult, but even in difficult periods of time, it takes the courage to set the right priorities and take the right decisions.
I'm convinced we'll see the share price going up, and we'll be very happy a year from now. Thank you very much. Have a nice evening.
Thank you very much, Paul. Now, this brings us to the end of the official part of this year's annual general meeting of Sika. We've had an annual general meeting with overwhelming support from you, esteemed shareholders, and that wasn't evident. That wasn't obvious for this year. I would like to thank you for your loyalty to Sika and your trust in the Board of Directors and the Group Management. We're committed to continuing to justify your trust in the future. The 59th annual general meeting will take place on March 23, 2027, once again at this place here, Kongresshaus Zürich. I look forward to welcoming so many of you here again.
Please hand in your voting devices and headphones either to the Sika assistants who will be passing by or leave them on your seats afterwards. Following this meeting, there'll be a standing reception and refreshments on the ground floor. I will warmly invite you to stay a little longer and raise a glass with us. I hereby declare the annual general meeting in 2026 as officially closed.