Sales growth of 2.9%, Ebitda at 15.1%

At the annual press conference, Dormakaba CEO Riet Cadonau speaks of organic growth for the Group of 2.9%. Not quite a satisfactory result for the CEO. However, Cadonau expects a total of 3.5% for the full 2017/18 fiscal year, compared to management's original target of 4 to 4.5%. The Swiss stock exchange punished the Dormakaba share with a minus of almost 10% on the balance sheet day.

Net income and net debt

The Ebitda margin, i.e. earnings before interest, taxes, depreciation and amortization, improved to 15.1% compared with 14.9% in the previous year, thanks in particular to cost savings as a result of the merger of Dorma and Kaba and positive acquisition effects (Mesker, Best Acces Solutions, Kilargo and Skyfold), Cadonau says. For the first half of 2017/18, the group posted a net profit of 113.6 million Swiss francs (previous year: 95.8 million Swiss francs). The locking technology company reported total assets of Fr. 1.98 billion and net debt of Fr. 786.6 million for the first half of the fiscal year. The Group's equity amounted to 114.5 million francs, and the equity ratio was 5.8%.

Development of the segments

And this is how the five Dormakaba segments developed in the first half of 2017/18:

• Access Solutions AMER (North and South America): This resulted in sales growth of 2.2% compared to the previous year and segment sales of CHF 410.5 million. The Ebitda margin decreased to 19.7% (previous year: 21.3%). Sales growth was weakened by delays of major projects in the southern USA due to hurricanes.
• Access Solutions APAC (Asia Pacific): AS APAC grew by 6% and generated segment sales of Fr238.1 million. The Ebitda margin improved to 14.1% compared to 11.5% in the previous year. According to data, growth was strongest in Australia and China. In China, for example, the F306+BLE (bluetooth low energy) door lock had been a significant growth driver.
• Access Solutions DACH (Germany, Austria and Switzerland): The region grew by 2.1% and achieved segment sales of CHF 420.9 million. The Ebitda margin decreased to 17.5% compared to 18.4% in the previous year. Delays in the extensive restructuring in Germany, an unfavorable product mix and merger-related IT costs are cited as the reasons. External growth at AS DACH was mainly driven by increased sales in Austria. Switzerland also achieved growth, while sales in Germany were below the previous year's level despite good order intake, according to the executive report. There were delays in the project business in particular - orders are expected to be realized in the second half of the financial year. The segment will continue to invest in innovative products: One example is the TS 98 XEA door closer, which was launched in the fall of 2017 and is already making a positive contribution to the results.
• Access Solutions EMEA (Europe, Middle East and Africa): This segment grew by 2.7% and achieved sales of 375.8 million Fr. The Ebitda margin improved to 7.6% compared to 6.8% in the previous year. The talk is of strong growth in Russia and Turkey in particular.
• Key & Wall Solutions: In November 2017, the Group combined the two smallest segments Key Systems and Movable Walls. The new segment generated sales growth of 2.3% and achieved sales of Fr185.7 million. The Ebitda margin improved to 14.1% compared to 13.6% in the previous year.

Integration soon completed

As planned, the Group will have largely completed the outstanding Dorma and Kaba integration projects by the end of June 2018. Apart from Germany, where the extensive restructuring is taking longer than originally planned, Riet Cadonau remarked at the media conference. Overall, the company expects the synergies driven by the merger to take full effect in the 2018/19 financial year.

Wetzikon: Robots in action

Even though the mechanical Kaba key is far from out of fashion, the technology-driven company is increasingly focusing on digitization. In its product portfolio, but also in production itself. Last November, for example, the Wetzikon ZH site with its 450 or so employees once again pushed ahead with automation: Self-driving robots are now in use in key production. This step is absolutely necessary, says the CEO, because it is the only way to remain competitive in Switzerland.

The headquarters in Rümlang ZH also underwent changes: the company renovated the disused factory building to Minergie standards. The light-flooded hall is now equipped with various self-contained "cubicals" (see photo); they are available to the company's various service departments. This change of use probably also illustrates the shift towards Industry 4.0, which suits a company that, according to the 2018 Thomson Reuters study, is one of the world's top 100 technology leaders. (rs)

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