Region Americas

5 min.

Region Americas is comprised of the former segment Access Solutions AMER (AS AMER). All figures were consolidated according to the new operating model. To ensure comparability, dormakaba will disclose the comparable figures of the former operating model in the Notes to the Consolidated Financial Statements for the full financial year 2021/22.

Region Americas achieved total sales of CHF 744.7 million in the financial year 2021/22 (previous year: CHF 672.0 million). Organic sales growth was at 8.3%, with accelerating growth in the second half. Growth was driven by recovery in the US commercial construction market, particularly in renovation and replacement, Latin America strength, market share gains, and price realization that roughly equaled the volume contribution.

In the period under review, growth was broad-based across all Product Clusters, with double-digit growth in parts of the core business including Services and Lodging Systems as well as in Door Hardware and Mechanical Key Systems. The Lodging business started to recover in 2021/22 due to retrofit projects in hospitality and strong sales growth in multi-housing, where dormakaba gained market share. Entrance Systems and Electronic Access & Data, which are core business, as well as Safe Locks, experienced mid-single digit growth. Safe Locks continue to be well adopted within the fast-growing crypto-currency ATM market. Nevertheless, the operating environment was challenging due to supply chain and labor shortages and continuing freight delays. Electronic Access & Data was unfavorably impacted by the scarcity of electronic components for access control hardware offerings.

Adjusted EBITDA increased to CHF 132.8 million (previous year: CHF 129.8 million) with an adjusted EBITDA margin of 17.8% (previous year: 19.3%). The margin was impacted by higher raw material and freight costs as well as labor cost inflation and a negative product mix, which more than offset higher volumes and sales price increases. In particular, inbound and outbound freight increases could not be offset in the short term by price increases. In addition, the scarcity of electronic components meant that high-margin orders for Electronic Access & Data products could not be fully satisfied, which had a temporary impact on profitability in the second half of 2021/22. Finally, sales in the high-margin high-security government Safe Locks business were lower due to US government spending.

From 1 January 2022, dormakaba started implementing its new strategy Shape4Growth, which includes a turnaround plan for the Region as well as an annual growth target of 4 to 6% and an increase in the adjusted EBITDA margin by 400 to 500 basis points over the coming three years. In support of this effort, sales excellence programs continue to drive revenue growth, a pricing initiative is underway, and, as announced, the hollow metal door business (Mesker) was divested. The Mesker transaction closed on 21 June 2022, allowing the management to focus on dormakaba’s core access solutions offering in the Region, an important step in the turnaround of the Americas business. In the financial year 2021/22, Mesker had a negative effect of 210 basis points (previous year: 240 basis points) on the Regions’s adjusted EBITDA margin.

For financial year 2022/23, the Region Americas expects continued organic growth based on healthy order intake, a strong order book, and continued pricing traction. Growth will be supported by several contract wins, including awards to provide the comprehensive access control solution for a 3,800-room, new construction, mixed-use property development in Las Vegas; the replacement of a military residential access system in Hawaii; projects for airport security solutions for major international airports in Brazil and the US; and continued wins in the sports and entertainment access market.

However, visibility continues to be limited due to the continued electronics supply chain constraints, inflationary pressure, and the impact of a potential deterioration in the macroeconomic environment. The Region will continue to increase sales prices to strive to offset higher raw material, freight, and labor costs.

Future growth will be driven by innovative products and solutions, including EntriWorX, the architectural project planning and specification writing platform, that was previewed to the North America market in June 2022 at A’22 – the American Institute of Architects’ annual Conference on Architecture, and the launch of dormakaba’s global door closer platform in the North America market, representing a key opportunity to establish steady share growth in a core product offering.

Key figures – Region Americas

Sales (CHF million) - Region Americas