07-09-16 - dorma+kaba Group: Financial results 1516_endorma+kaba increases sales and profitability – unchanged dividend of CHF 12 per share proposed
In the first full year of joint operations, dorma+kaba increased its consolidated sales on a pro forma basis and currency-adjusted by 2.6% to CHF 2,302.6 million. Its EBITDA margin improved on a pro forma basis from 13.5% to 14.4%. dorma+kaba has a strong balance sheet with a solid equity ratio of 43.2% and net liquidity of CHF 159.1 million; in the year under review it generated a high cash flow from operating activities of CHF 327.6 million. The integration process is progressing according to plan. During the year under review there were one-time merger-related integration costs of CHF 89.4 million; these are shown separately as an extraordinary result. The Board of Directors is proposing the distribution of an unchanged ordinary dividend of CHF 12.00 per share for the 2015/2016 financial year.
Rümlang, 07.09.2016 - In 2015/2016, its first financial year as a merged company, dorma+kaba reached the operational goals and milestones it had set for the integration process.
The Group increased its consolidated sales by 2.6% to CHF 2,302.6 million currency-adjusted on a pro forma basis (reported: CHF 2,115.9 million). Organic growth came to 2.3%, which is at the upper end of the target range of 1.3% to 2.3%.
Profitability and net profit
dorma+kaba’s operating profit for the 2015/2016 financial year was higher than in the previous year. On a comparable pro forma basis, EBITDA went up by 9.6% to CHF 332.7 million. The EBITDA margin increased by 90 basis points from 13.5% in the previous year to 14.4% (reported: EBITDA CHF 311.4 million, EBITDA margin 14.7%), which is within the target range for the 2015/2016 financial year of 14.1% to 15.1%. The increase in profitability compared with the previous year is mainly due to the positive business performance of the Access Solutions AMER segment in North America, as well as to the efficiency gains and initial cost savings from the merger. Pro forma EBIT for the year under review came to CHF 278.2 million, a rise of 10.4%. The EBIT margin increased from 11.1% in the prior year to 12.1% (reported: EBIT CHF 261.6 million, EBIT margin 12.3%).
dorma+kaba’s ordinary result for the 2015/2016 financial year rose by 9.2% to CHF 262.0 million on a pro forma basis (reported: CHF 248.9 million) compared to CHF 239.9 million in the previous year. The extraordinary result of CHF -89.4 million (pro forma and reported) is entirely made up of integration costs incurred in connection with the merger to form dorma+kaba Group. Owing to these one-time integration costs, the pro-forma result after tax came to CHF 117.2 million (reported: CHF 104.7 million), compared to CHF 186.6 million in the previous year.
Strong balance sheet with solid net cash position and equity ratio
dorma+kaba Group has a very solid balance sheet structure. Its total assets as at 30 June 2016 amounted to CHF 1,579.3 million. The Group has net liquidity of CHF 159.1 million, and its equity ratio is 43.2%.
High operational cash flow
Cash flow from operating activities in financial year 2015/2016 came to CHF 327.6 million, and free cash flow to CHF 268.8 million. Cash flow from investment activities amounted to a net CHF 13.5 million, which includes capital expenditure of CHF 61.8 million. Cash flow from financing activities came to CHF -213.2 million. This is made up mainly of dividend payments totaling CHF 240.7 million, which includes the ordinary dividend paid by the former Kaba for financial year 2014/2015 (CHF 12.00 per share) and the former Kaba’s special merger-related dividend.
Access Solutions AMER (North and South America)
This segment posted very good operating results for the 2015/2016 financial year. On a pro forma basis, Access Solutions AMER increased total sales by 5.4% organically and currency-adjusted on the previous year to CHF 514.9 million, and improved its EBITDA margin from 19.3% to 20.9%.
Access Solutions APAC (Asia Pacific)
As expected, the market environment for this segment remained challenging during the year under review, especially in China, though good results were achieved in Australia, South East Asia and some other Asian countries. On a pro forma basis, Access Solutions APAC as a whole recorded total sales of CHF 376.1 million (previous year CHF 377.8 million) and improved its EBITDA margin from the previous year’s 8.7% to 9.6%.
Access Solutions DACH (Germany, Austria and Switzerland)
Performances across the DACH region were mixed. Growth was driven by good results in Germany. Sales growth in Austria was slightly better than in the previous year, while in Switzerland there was no growth. Overall the segment saw total sales go up by 1.6% organically and currency-adjusted to CHF 790.0 million on a pro forma basis, with an EBITDA margin unchanged on the previous year at 18.6%.
Access Solutions EMEA (Europe, Middle East and Africa)
Despite economic conditions varying across the relevant regions, the segment’s operating results were within expectations. Access Solutions EMEA secured particularly good growth in Western Europe, with total sales up by 3.9% organically and currency-adjusted to CHF 736.5 million on a pro forma basis. The EBITDA margin came to 6.6% (previous year 6.9%).
Acquisition-adjusted, sales at the Key Systems segment were not quite as high as in the previous year, but they were within expectations, particularly since 2014/2015 sales were boosted by a one-off effect in the North American automotive business. Key System generated total sales of CHF 208.5 million (previous year CHF 206.8 million) and posted an EBITDA margin of 17.1% (previous year 17.2%).
The newly created Movable Walls segment recorded good results for its first financial year as a stand-alone unit. On a pro forma basis, total sales were 3.9% up organically and currency adjusted on the previous year at CHF 113.8 million, while the EBITDA margin improved from 9.0% to 11.5%.
Integration process on track
Implementation of the integration process is progressing according to plan and will continue as scheduled. Following the legal completion of the merger on 1 September 2015, dorma+kaba has, as planned, been operating as ONE company since 1 July 2016. In addition, the Group has been trading globally under the umbrella brand dormakaba since the start of the new 2016/2017 financial year. The key priorities in the next phase of integration are the implementation of defined integration projects, further growth and efficiency programs, and the continued development of a consistent corporate culture across dorma+kaba. The aim is to largely complete all of the integration process by the end of the 2017/2018 financial year.
The strategic focus is on sustainable, profitable growth. Innovative new products and the strength of the combined portfolio should in future allow dorma+kaba to grow faster than the weighted GDP growth of the markets relevant to the company.
The Group expects to record organic growth of around 3% in the 2016/2017 financial year at constant exchange rates. It also aims to increase EBITDA on a comparable basis, thanks mainly to synergies from the merger and greater sales volumes. Most of these positive effects will be offset over the next year by further integration costs, e.g. for IT and branding. dorma+kaba assumes, therefore, that the EBITDA margin for financial year 2016/2017 will remain around the same level as in the previous year.
dorma+kaba is also confirming its mid-term targets. Based on the completed merger, the ongoing integration and the Group’s operating performance, dorma+kaba expects to achieve an EBITDA margin of 18% in 2018/2019. Organic growth should then be 2 percentage points above the adjusted GDP growth of the markets relevant to dorma+kaba.
Proposals to the Annual General Meeting of 18 October 2016
The Board of Directors is proposing to the Annual General Meeting to approve an unchanged dividend of
CHF 12.00 per share for the 2015/2016 financial year. This corresponds to a pay-out ratio of around 50% of consolidated net profit after minority interests, if the one-time merger-related integration costs and associated tax effects are excluded.
All ten members of the Board of Directors will present themselves for re-election at the Annual General Meeting of dorma+kaba Holding AG on 18 October 2016. The Board of Directors is also proposing the re-election of Ulrich Graf as Chairman of the Board of Directors, and of Rolf Dörig, Hans Gummert and Hans Hess as Members of the Compensation Committee.