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.

The comprehensive crisis management measures implemented by the Group management last financial year due to Covid-19 pandemic are ongoing. 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. The accelerating business in the fourth quarter and the shift of focus towards profitability and sales growth resulted in an increase in accounts receivables and inventory which however remained below pre-Covid level.

Borrowings and other financial liabilities

Credit facility

As of 30 June 2021, the short-term bank loans and overdrafts amount to CHF 9.9 million (2019/20: CHF 139.0 million).

In November 2020 dormakaba renewed its main credit facility of CHF 500 million which expired in March 2021. The new five-year syndicated loan in the amount of CHF 525 million includes options for a prolongation of two additional years and for an increase of up to CHF 200 million. For the first time incentives for the achievement of ambitious sustainability performance objectives in the form of three important ESG (Environmental, Social, and Governance) criteria were included in the contract. As in the expiring contract, also in the new credit facility the single financial covenant is the leverage factor (calculated as the ratio of net debt to EBITDA). As of 30 June 2021 and throughout the 2020/21 financial year, dormakaba complied with the financial covenant. As per 30 June 2021 this credit line was undrawn.

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 2021 and 30 June 2020, 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). Due to its maturity the first tranche of CHF 360 million is disclosed as per 30 June 2021 within current borrowings (previous year in non-current liabilities). In the 2020/21 financial year the nominal buy-back value of CHF 20.0 million of the bond has been netted with the short-term part of the liability.

The interest expenses for the two bonds amount to CHF 4.4 million in 2020/21 (2019/20: CHF 4.5 million). This is disclosed in the note on the financial result (1.4).