Annual Report 2017/18

Segment Key & Wall Solutions

5 min.

Strong growth and higher profitability

dormakaba combined its Key Systems and Movable Walls segments in November 2017 to form the Key & Wall Solutions segment.

Operational performance

Key & Wall Solutions reported total sales of CHF 387.5 million in 2017/18, representing year-on-year organic sales growth of 4.9%. EBITDA amounted to CHF 56.7 million, which is an increase of 19.6% over the year-back figure, while the EBITDA margin was higher at 14.6% (previous year 14.3%). This margin increase was due to the positive effect of the Skyfold acquisition and higher volumes, which more than offset a slightly negative product mix and raw material price increases.

Market development

Business Unit Key Systems increased its sales in 2017/18 with particular good growth in the second half of the financial year, driven by strong sales in Automotive Solutions, where a new product was successfully introduced in December 2017. Key Systems continued to experience increased demand in most of its markets, except for the key replacement business in North America which was slightly below previous year. Asia and South America reported double-digit sales growth, while Europe showed good sales growth – especially in Italy – with sustained demand across all product categories (key blanks, key cutting machines, automotive solutions).

Business Unit Movable Walls experienced double-digit organic sales growth with good demand in almost all regions. There was good growth in particular in the US, driven by strong underlying demand and realization of delayed customer projects from the previous year. While the sales growth of the business in Asia was much higher than the year before, the sales development in Europe was slightly below prior-year level. The Sykfold business that was acquired in July 2017 contributed very positively to EBITDA. On top, first top line synergies have been realized.

Outlook

No major changes in the business environment are expected within Key & Wall Solutions.

The expansion of its market presence is a key objective for Key Systems, especially in regions with high potential and emerging markets with additional focus on automotive solutions. An example for this strategy is the acquisition of Klaus Group, a market leader in several South American countries that produces and distributes key blanks as well as other brass products. This acquisition, which was completed in May 2018, strengthens Key Systems' presence and market position in South America. The entire business unit Key Systems will continue to improve its cost leadership through operational excellence along the entire value chain.

Business Unit Movable Walls will focus to continue to profitably grow its business in the US as well as Asia. In addition, the integration of Skyfold is expected to contribute positively to growth and profitability. In Germany the main focus will be on measures to increase the automatization of its main production site which are expected to be finalized in 2018/19 with the aim to sustainably improve the cost base and efficiency of the European business.

Third-party sales by segments

Key figures1)

 

 

 

 

 

 

 

 

 

in CHF million

 

Financial year ended 30.06.2018

in %

 

Financial year ended 30.06.2017

in %

 

Change on previous year in %

Net sales third parties

 

374.2

 

 

321.4

 

 

16.4

Intercompany sales

 

13.3

 

 

10.4

 

 

 

Total segment sales

 

387.5

 

 

331.8

 

 

16.8

Change in segment sales

 

55.7

16.8

 

9.5

2.9

 

 

Of which translation exchange differences

 

7.2

2.2

 

0.0

0.0

 

 

Of which acquisition (disposal) impact

 

32.4

9.8

 

0.0

0.0

 

 

Organic sales growth

 

16.1

4.9

 

9.5

2.9

 

 

Operating profit before depreciation and amortization (EBITDA)

 

56.7

14.6

 

47.4

14.3

 

19.6

Average number of full-time equivalent employees

 

2,139

 

 

2,056

 

 

 

1)In the financial year ended 30.06.2018 the segments Key Systems and Movable Walls were combined into segment Key & Wall Solutions. In order to enable a comparison with current-year data, prior year data has also been consolidated.

 
 

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