The security group is feeling the effects of Covid-19
Dormakaba's 2019/20 financial year unfolded in two very different halves. The first half, with revenue growth of 0.8% and an EBITDA margin of 15.5%, was largely in line with expectations, while the impact of the Covid 19 pandemic led to a slump in business from February 2020, the company said today.
In the second half of the financial year Dormakaba a Covid-19-related decline in revenue of 14.3% and an EBITDA margin of 9.6%. Overall, revenue reportedly decreased by 6.9% and EBITDA margin reached 12.8% in fiscal year 2019/20.
All segments affected
All segments were affected by the decline in business, although the extent of the impact of the pandemic varied by country or region. Asia was the first to be affected by the pandemic and certain regions experienced a sharp decline in sales due to lockdowns. For example, sales in India declined by up to approximately 90% between April and June 2020 compared to the same period last year. Other countries, however, were far less affected. In Switzerland and Germany, for example, sales growth was recorded for fiscal 2019/20.
Dormakaba posted consolidated net sales of CHF2.539 billion in fiscal 2019/20, down CHF9.9% from the previous year. This includes the appreciation of the Swiss franc, which caused a strongly negative currency translation effect of 3.7% or CHF 104.3 million, the company said.
Profitability and net income
EBITDA in fiscal 2019/20 amounted to CHF 325.0 million (previous year CHF 448.0 million), according to the release; this was with a positive effect of CHF 9.3 million from portfolio adjustments (previous year CHF -1.9 million) and a negative effect of CHF 16.0 million from currency translation (previous year CHF -2.3 million). In addition to lower sales volumes as a result of the Covid 19 pandemic, exceptional one-time costs - including for restructuring measures - and other factors impacted and had a negative impact of 70 basis points on the EBITDA margin in the reporting period, the company wrote. These effects would have more than offset improvements in operating efficiency, final merger-related cost synergies and lower raw material costs.
Profit before tax reached 211.2 millionFr in fiscal 2019/20 (previous year 332.7 million). Income taxes amounted to Fr. 47.1 million, corresponding to an income tax rate of 22.3% (previous year 24.1%). Dormakaba closed fiscal 2019/20 with a consolidated net profit of Fr164.1 million, compared with Fr252.5 million in the previous year.
Cash flow and balance sheet
Cash flow from operating activities rose to CHF 407.9 million (previous year CHF 372.8 million). This increase was due to the early measures taken to strengthen liquidity during the Covid 19 pandemic, in line with the "cash is king" principle, Dormakaba said. Cash flow from investing activities of -$232.4 million (previous year -$67.8 million) mainly included capital expenditures related to the acquisition of Alvarado Manufacturing Co. Inc. which closed on July 31, 2019, it said. As a result, free cash flow decreased to 95.7 million (previous year 212.9 million Fr.).
As of the close of fiscal 2019/20, Dormakaba reported total assets of Fr. 1.808 billion, with net debt of Fr. 667.7 million. As of the balance sheet date June 30, 2020, equity stood at Fr. 141.3 million (June 30, 2019: Fr. 258.5 million).
Press release Dormakaba
