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Healthcare

UPDATE 2-Sika confident of sales boost in 2021 as construction, automotive recover

* Company looks to make 5-6 acquisitions this year

* Sees recovery in construction as stimulus packages launch

* Sales fall in 2020 as franc strength reduces revenues from abroad (Recasts, adds CEO comment, analysts)

Jan 12 (Reuters) - Sika expects an acceleration in sales growth in local currencies of 6% to 8% in 2021, the Swiss construction chemicals maker said on Tuesday, as the building and automotive industries rebound from the global coronavirus crisis.

Sika’s local currency sales rose by 3.4% during 2020, although the rise of the Swiss franc during the year - as investors bought safe haven assets during the COVID-19 pandemic - meant reported sales fell 2.9%.

Chief Executive Paul Schuler said he expected a “strong” 2021 for the Swiss company, whose results are seen as a proxy for the broader construction industry because of the wide range of products it supplies to strengthen and waterproof building materials.

Schuler looked forward to higher demand as government stimulus packages kick in for new build and refurbishment projects, while he also expects to gain from higher vehicle production volumes this year.

Tesla, Daimler and Ford are among Sika’s customers in the automotive industry, using its products to soundproof and reduce the weight of cars.

Sika’s sales momentum improved during 2020 after crashing in March and April, with year-on-year rises of 2.1% in the third quarter and 5.5% in the fourth quarter.

“There has been an acceleration and strong rebound in the fourth quarter and I expect this trend to continue,” Schuler told Reuters in an interview.

He pointed to recoveries in Asia, particularly China where Sika’s sales increased in the double digit percentage range during the second half of the year.

“We are still aiming for local currency sales increase of 6% to 8% this year. We can reach that if we don’t see another shut down in construction or industry,” Schuler said.

For 2020, the Swiss company reported a 2.9% decline in annual sales to 7.88 billion Swiss francs ($8.85 billion) as the strong Swiss franc reversed a 3.4% rise in local currencies. Sika is due to report its full-year earnings on Feb.19.

Sika would also look to make five or six acquisitions during 2021, Schuler said, and would look at companies with revenues in the 50 to 100 million franc range. ($1 = 0.8908 Swiss francs) (Reporting by Sabahatjahan Contractor in Bengaluru and John Revill in Zurich; Editing by Shailesh Kuber and Jane Merriman)

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