3.1 Capital management

Capital management has the following objectives:

• securing sufficient liquidity to meet the Group’s needs to fulfil its financial obligations;
• securing sufficient funding capacity for future investments and acquisitions;
• ensuring creditworthiness;
• achieving an appropriate risk-adjusted return for investors.

As a consequence of the Covid-19 pandemic, dormakaba has adjusted its financial management in order to retain entrepreneurial flexibility and financial stability at all times during this crisis. Measures aimed at focusing on cash flow by following the “cash is king” principle. This includes daily monitoring of the liquidity and financial debt status on group level, also regarding financial covenants and undrawn credit facilities. Further increased attention was on the net working capital management, which also includes a strict credit management and collection discipline on the trade receivables as well as restrictions on capital expenditures.

Borrowings and other financial liabilities

Credit facility

As of 30 June 2020, the short-term bank loans and overdrafts amount to CHF 139.0 million (2018/19: CHF 84.9 million).

The majority of the current borrowings relates to a syndicated credit facility of CHF 500 million established in March 2016 for a five-year period, which includes options for a prolongation of two additional years and for an increase of up to CHF 200 million. The single financial covenant is the net debt ratio (calculated as the ratio of net debt to EBITDA). As of 30 June 2020 and throughout the 2019/20 financial year, dormakaba complied with this financial covenant.

The interest expenses on short-term bank loans and overdrafts are recorded within other interest expenses. Interest expenses are disclosed in detail in the note on the financial result (1.4).

Net debt

Disclosed below are the corresponding key figures as at 30 June 2020 and 30 June 2019, respectively, including the maturities.

The interest expenses for drawdowns from the syndicated credit facility and other credit facilities are recorded within other interest expenses. Interest expenses are disclosed in detail in the note on the financial result (1.4).

Bonds

Two bonds were placed in September 2017 in the Swiss capital market by dormakaba Finance AG, a Group company of dormakaba Holding AG, as a dual tranche transaction worth a total of CHF 680 million (ISIN CH0384629884 due in 2021 and ISIN CH0384629892 due in 2025).

The interest expenses for the two bonds amount to CHF 4.5 million in 2019/20 (2018/19: CHF 4.4 million). This is disclosed in the note on the financial result (1.4).