Segment Access Solutions APAC5 min.
Good organic sales growth with double-digit growth in China, higher profitability
AS APAC generated total sales of CHF 468.0 million in 2017/18. Organic sales growth was 4.5% compared to the previous year. The segment reported an EBITDA of CHF 65.8 million, which is 24.6% above previous year. The EBITDA margin increased to 14.1% (previous year 12.6%). This improvement was driven by higher volumes, strategic price adjustments and a favorable product mix which more than compensated the effects of higher raw material prices.
Access innovation at dormakaba
The segment generated good growth in most of its major regional markets. As in the previous year, there was double-digit sales growth in China, driven by the expansion of high end solutions and offerings, by the continued success of cost effective mid-market products and by the introduction of new products, such as the innovative F306+BLE door lock, the first BLE (blue-tooth low energy) electronic door lock by dormakaba for the Chinese market.
There was very good organic growth as well in Australia and in India. South East Asia, however, was impacted by a somewhat weaker construction market and sales were below previous year. Additionally, there was a significant base effect as the segment finalized a major project in the second half of 2016/17 (Singapore, Changi Airport Terminal 4).
There was continued good demand for Door Hardware and Services and strong demand for Lodging Systems. The segment successfully increased its sales prices to compensate for higher raw material costs such as zinc alloy and copper.
The post-merger integration was successfully finalized in all countries except for India. However, the segment could finally kick-off its post-merger integration in India in April 2018 immediately after the Dorset Kaba joint venture was dissolved.
Chinese company GMT, which joined dormakaba as part of the Best Access acquisition, was sold on 29 September 2017. GMT is reported in the segment “Others” in order to improve comparability of segment results.
AS APAC expects continued good growth in 2018/19 and will continue to execute its profitable growth strategy, which is leveraging the combined new product portfolio and improved cost structures. However, there is potential risk of further escalation of the trade conflicts between China and the US and of a further deterioration of the economic environment in South East Asia which might negatively impact growth expectations.
AS APAC gained contracts for several major new projects where products from multiple Product Clusters were specified like the ITPO (Indian Trade Promotion Organization) Exhibition and Convention Center in New Delhi or the International Convention Center developed by Reliance in India. The segment will continue to benefit from new innovative solutions like KTV Atrium Flex, cost-effective elegant full glass revolving doors with robust and quiet drives and easy maintenance which were launched in 2017/18.
The segment expects that it will continue to benefit from its acquired businesses. The TLHM business in Taiwan that was acquired as part of Best Access is expected to continue to contribute positively to sales growth and profitability. With the acquisition of Kilargo the segment gained market share in the door seal business in Australia. In April 2018, the segment completed the acquisition of the Commercial Building Physical Access Solutions business from Beijing-based Cambaum Group. With products including sensor or tripod barriers and different kinds of turnstiles, this business will strengthen the segment's position in the commercial smart buildings market in China.
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Financial year ended 30.06.2018
Financial year ended 30.06.2017
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