dorma+kaba
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Investor Relations

Financial commentary

Sales and profitability targets achieved

Sales

On a pro forma basis, the combined Group generated net sales of CHF 2,302.6 million in the financial year 2015/2016 (reported: CHF 2,115.9 million), an increase of 2.6 % using constant exchange rates. Organic sales growth was 2.3 %, while acquisition effects contributed 0.3 % to sales growth.

Profitability

On a comparable pro forma basis, EBITDA for the reporting period increased by CHF 29.1 million and came to CHF 332.7 million. The EBITDA margin improved to 14.4 %, compared to 13.5 % in the same period of the previous year (reported: CHF 311.4 million, resp. 14.7 %). The higher profitability was mainly due to a very positive business development of Access Solutions AMER in North America and due to first cost savings as a consequence of the merger. EBIT during the period under review reached CHF 278.2 million on a pro forma basis, and the EBIT margin increased to 12.1 % from 11.1 % in the same period of the previous year (reported: CHF 261.6 million, resp. 12.3 %) for the same reasons as mentioned above.

Financial result, ordinary result and taxes

The net financial result on a pro forma basis came to CHF –16.2 million (reported: CHF –12.7 million). The pro forma financial expense of CHF 23.3 million (reported: CHF 19.1 million) included mainly interests for loans and pension liabilities as well as exchange rate losses. The ordinary result on a pro forma basis came to CHF 262.0 million compared to CHF 239.9 million in the previous year (reported: CHF 248.9 million). The extraordinary result of CHF –89.4 million (pro forma and reported) covers exclusively integration costs relating to the merger of dorma+kaba. Income tax expense on a pro forma basis was CHF 55.4 million, representing a tax rate of 32.1 % (reported: CHF 54.8 million, or 34.4 %). The tax rate in 2015/2016 was above the comparable base of the previous year (pro forma basis: 22.2 %) as it was negatively impacted by losses related to post merger integration projects which resulted in tax losses as dorma+kaba does not recognize deferred tax assets on tax loss carryforwards regardless of the likelihood of later utilization.

Net profit

Net profit on a pro forma basis was impacted by the merger-related integration costs and came to CHF 117.2 million (reported: CHF 104.7 million) compared to CHF 186.6 million in the previous year. Net profit after minorities on a pro forma basis was CHF 60.4 million (reported: CHF 53.9 million).

Cash flow and balance sheet

Cash generated from operations was CHF 327.6 million, and free cash flow came to CHF 268.8 million compared to CHF –38.2 million in the previous year. Cash flow from financing activities was CHF –213.2 million mainly due to dividend payments in a total amount of CHF 240.7 million (payment of the ordinary dividend and the special dividend, which was related to the merger transaction, both by former Kaba). The combined dorma+kaba Group reported total assets of CHF 1,579.3 million as at the balance sheet date of 30 June 2016. Within current assets, cash and cash equivalents amounted to CHF 213.2 million and inventories to CHF 364.0 million. Non-current assets consisted mainly of property, plant and equipment worth CHF 330.0 million. Liabilities totaled CHF 898.8 million, with financial liabilities coming to CHF 54.1 million. As at 30 June 2016 the combined Group’s net cash position came to CHF 159.1 million. With an equity of CHF 680.5 million and an equity ratio of 43.2 %, dorma+kaba Group holds a very solid balance sheet.

Currency effects

Due to the Swiss National Bank’s discontinuation of the CHF 1.20 minimum rate on 15 January 2015, the Swiss franc showed a significant value increase against the Euro in the reporting period. The average Euro exchange rate against the Swiss franc compared to the previous year went down by 4.0 % from CHF 1.133 to CHF 1.087. In contrast, the average exchange rate of the US dollar went up by 4.1 % from CHF 0.941 to CHF 0.980, compensating part of the negative currency effects. The impact of foreign currencies on a pro forma basis on net sales for 2015/2016 was CHF –60.7 million, respectively CHF –5.8 million on EBITDA.