Half-year results as at 31/12/2015: dorma+kaba Group off to a successful start as a combined company in first half of 2015/2016 financial year

Rümlang,
  • Consolidated sales up 2.6% on a pro forma basis to CHF 1,135.5 million

  • EBITDA margin up from 13.7% a year previously to 14.6% on a pro forma basis

  • Strong balance sheet, solid equity ratio and net liquidity

  • First successes achieved in new organization as a combined company

On 1 September 2015 the new dorma+kaba Group was created through the merger of two strong companies. The Group achieved its first successes in its new organization as a combined company during the first months of the 2015/2016 financial year, finishing the period under review with good results. On a pro forma basis and at constant exchange rates consolidated sales increased during the period by 2.6% to reach CHF 1,135.5 million (CHF 947.6 million reported). Organic sales growth was 1.8% while acquisition effects contributed 0.8% to sales growth.

Profitability and net profit

During the period under review, dorma+kaba achieved a higher operating profit than a year previously. On a comparable pro forma basis, EBITDA came to CHF 165.4 million (CHF 144.6 million reported: 4 months of former Dorma, 6 months of former Kaba) and the EBITDA margin rose from 13.7% in the same period of the previous year to 14.6% (15.3% reported). The improved profitability is due mainly to initial cost savings resulting directly from the merger, and to a very healthy performance in North America.

The extraordinary result on a pro forma basis of CHF -34.8 million (CHF -34.7 million reported) covers exclusively integration costs relating to the merger of the dorma+kaba Group.

dorma+kaba finished the first half of 2015/2016, its first half year as a merged company, with a pro forma profit of CHF 67.1 million (CHF 57.4 million reported).

Strong balance sheet

The combined dorma+kaba Group reported total assets of CHF 1,518.4 million as at the reporting date of 31.12.2015 and net liquidity of CHF 31.3 million. With total equity of CHF 621.6 million and an equity ratio of 41.2%, the Group has a very solid balance sheet structure.

New organizational structure provides optimum coverage of customer needs

The businesses in which dorma+kaba is globally active have been structured into six segments. Access Solutions (AS) is divided into four regional segments: AS AMER (North and South America), AS APAC (Asia-Pacific), AS DACH (Germany, Austria and Switzerland) and AS EMEA (Europe, Middle East and Africa). Additionally, there are the globally focussed segments Key Systems and Movable Walls.

The new organizational structure of Access Solutions has a matrix structure. Its global product portfolio has been divided into eight product clusters, each of which is the responsibility of one of the four AS segments as follows: Services, Lodging Systems and Safe Locks (AMER), Door Hardware, Interior Glass Systems and Entrance Systems (DACH), and Master Key Systems and Electronic Access & Data (EMEA). These global product clusters are complemented by local products in all the AS segments.

Segment performance

Access Solutions AMER (North and South America)

The AS AMER segment began the 2015/2016 financial year very well and achieved pleasing operating results. On a pro forma basis, AS AMER reported consolidated sales of CHF 255.6 million (CHF 218.2 million reported) and an EBITDA margin of 20.3% (22.8% reported).

Access Solutions APAC (Asia-Pacific)

As expected, the market environment remained challenging for the AS APAC segment, especially in Asia. Nevertheless, on a pro forma basis, AS APAC reported consolidated sales for the period under review of CHF 186.4 million (CHF 148.0 million reported) and an EBITDA margin of 9.5% (8.4% reported).

AS DACH (Germany, Austria and Switzerland)

Given the mixed economic performance in the DACH region, results posted by the newly created AS DACH segment were within the expected range. On a pro forma basis AS DACH posted consolidated sales of CHF 386.1 million (CHF 310.0 million reported), while its EBITDA margin came to 18.9% (18.3% reported).

AS EMEA (Europe, Middle East and Africa)

Despite the variation in economic conditions between the different regions, operating results at the AS EMEA segment were within expectations in terms of both sales and profitability. On a pro forma basis AS EMEA generated consolidated sales of CHF 357.8 million (CHF 298.8 million reported) and achieved an EBITDA margin of 7.9% (9.3% reported).

Key Systems

The segment performed as expected during the period under review and achieved good results. Key Systems recorded consolidated sales of CHF 99.3 million and achieved an EBITDA margin of 16.1%.

Movable Walls

Within the newly created Movable Walls Segment, global activities in the space-dividing systems sector are being reported as a single unit under joint management for the first time. Movable Walls finished its first half-year as an autonomous segment with consolidated pro forma sales of CHF 56.9 million (CHF 38.5 million reported) and an EBITDA margin of 11.5% (12.0% reported).

Exploiting potential for synergies within the Group

The dorma+kaba Group follows a clear strategic agenda focused on profitable growth. In order to exploit the synergy potential created within the Group by the merger to the full we will, as planned, be implementing targeted concentration and efficiency raising measures as the merger process continues. The aim is to strengthen the Group's market position in all segments so that we can utilize the additional growth opportunities in all regions as effectively as possible and thus increase the Group’s profitability for the long term. Implementation of the first projects has already begun.

Expectations for the current year

The global macroeconomic and geopolitical environment is expected to remain challenging and volatile. dorma+kaba expects the economic climate to be good in North America and largely moderate in Western Europe. Meanwhile the situation in Asia-Pacific, Eastern Europe and Latin America will remain very demanding. For the full year 2015/2016, and on a comparable pro forma basis at constant exchange rates, dorma+kaba expects an organic growth rate and an EBITDA margin at the level of the current half-year results plus or minus 0.5 percentage points.