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dormakaba announces preliminary key figures for the 2017/18 financial year and outlook

dormakaba today announced preliminary, unaudited key figures for the 2017/18 financial year. Sales and EBITDA increased, organic sales growth and the EBITDA margin however remained below expectations. The integration process has largely been completed in most countries. dormakaba will continue to consequently pursue its business strategy and, over the coming years, plans to further invest substantially in digitalization and innovation in order to strengthen its market position sustainably. The Group confirms its medium-term financial targets, which it now aims to reach at the latest in the 2020/21 financial year.

Preliminary, unaudited key figures for 2017/18

In the 2017/18 financial year, dormakaba increased consolidated sales by around 13% to approx. CHF 2.84 billion (previous year CHF 2.52 billion). As in the first six months, organic sales growth for the second half of 2017/18 rose only moderately. Organic sales growth for the full financial year was around 2.5%. Pleasing growth rates were achieved for Key & Wall Solutions and Access Solutions Asia-Pacific, where the integration has been completed, while in Germany and the US, the last financial year was still significantly impacted by the integration process. Overall, the integration is proceeding according to plan in almost all countries and was largely completed as foreseen. All of the acquisitions since the dormakaba merger have made a positive contribution to results.

On the cost side, further progress was achieved during the course of the integration. In Germany, however, part of the efficiency gains will only be achieved with a delay; this is mainly due to the socially acceptable measures relating to job reductions agreed to with the social partners. The relocation of the production for standard door closers from Germany to Singapore and China was completed as planned.

The operating profit (EBITDA) increased by around 10% (previous year CHF 387 million). At around 15.0%, the EBITDA margin was slightly below the previous year (15.4%). This in particular reflects the delay in the realization of cost synergies in Germany as well as the not yet fully effective revenue synergies from the combined product portfolio. Specifically, in Germany as well as the US, not all business opportunities were exploited, as the organization was more absorbed by the integration than expected. In the US, profitability was also adversely impacted in particular by the weak environment for ATM locks (Safe Locks) as well as by a declining services business.

Riet Cadonau, CEO of dormakaba: “The results for the 2017/18 financial year are not in line with our ambitious targets, but are solid in light of the progress made with regard to integration. Our company is very well positioned in the market for access and security solutions. We want to take advantage of this position to achieve further profitable growth.”

Outlook

In light of the results for the 2017/18 financial year, which are below expectations, and due to the delay of the integration particularly in Germany and the US, dormakaba is adjusting the timeline for achieving its medium-term financial targets. In line with its strategy, the company will continue to invest significantly in innovation as well as allocate substantial additional funds to its digital transformation in the coming years. Provided the business environment is stable, the company aims to achieve its targeted EBITDA margin of 18% at the latest by 2020/21 instead of the 2018/2019 financial year. Also by 2020/21, organic sales growth should be 200 basis points above the GDP growth in dormakaba’s relevant markets.

For the 2018/19 financial year, dormakaba aims to substantially increase its investments in Information Technology to advance the digitalization of the company. In addition, with a view to strengthening innovation, the company aims to continue to invest around 4-5% of sales in research and development, which corresponds to over CHF 100 million. As a result, dormakaba expects an EBITDA margin in the range of 16.0% – 16.5% for the current financial year 2018/19. In terms of sales, the company expects to see organic growth in line with the previous year.

Ulrich Graf, Chairman of the Board of Directors of dormakaba: “The Board of Directors wants to further strengthen dormakaba with respect to innovation and digitalization through targeted investments, even if, in light of the results for the past financial year, this means that we will achieve our medium-term financial targets only at a later point in time. These investments are essential for sustainable business development, which will benefit our customers, shareholders and employees.”

The complete, final and audited financial results for the 2017/18 financial year will be announced on
11 September 2018.

Download Media Release (PDF)


Media and Investor Information

A telephone conference will be held in German for media representatives from 8:00 to 8:30 am.

A telephone conference will be held in English for analysts and investors from 9:00 to 9:30 am.

The dial-in numbers for the conferences are as follows:
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Speakers dormakaba Group: Riet Cadonau, CEO / Bernd Brinker, CFO

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