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 in the last financial year due to the Covid-19 pandemic as well as due to the war in Ukraine are ongoing. Measures aimed at focusing on the receivable collection to limit the days sales outstanding increase following the sales growth. The earlier introduced daily monitoring of the liquidity and financial debt status on Group level, including financial covenants and undrawn credit facilities, was continued. 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 inflationary pressure of raw materials, the transportation cost increase as well as increased safety stock due to ongoing supply chain issues as well as the accelerating business focusing towards profitability and sales growth resulted in an increase in accounts receivables and inventory that was accepted to reduce backlog and ensure delivery capability. The inventory increase is seen as a temporary measure and actions to reduce to prior crisis level are ongoing.

Borrowings and other financial liabilities

Credit facility

As of 30 June 2022, the short-term bank loans and overdrafts amount to CHF 473.4 million (2020/21: CHF 9.9  million).

In November 2020, dormakaba secured a five-year syndicated loan in the amount of CHF 525 million that 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. The syndicated credit facility contains a single financial covenant that is the leverage factor (calculated as the ratio of net debt to EBITDA). As of 30 June 2022 and throughout the 2021/22 financial year, dormakaba complied with the financial covenant. As per 30 June 2022, this credit line was 30% drawn.

The CHF 360 million bond maturity in October 2021 was refinanced by drawings under the syndicated credit facility due to the unfinished strategy project Shape4Growth. The planned capital market take out in Spring 2022 was cancelled due to the war in Ukraine. To ensure the usual financial flexibility under the syndicated credit facility, dormakaba signed a 12-month CHF 300 million credit facility with one major Swiss bank in June 2022 to „bridge to bond“. This credit facility is fully drawn.

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 2022 and 30 June 2021, 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 first tranche of CHF 360 million was  matured as of 13 October 2021 and was refinanced by drawings of CHF 340 million in the syndicated credit facility since dormakaba held CHF 20.0 million financed from own cash.

The interest expenses for the two bonds amount to CHF 3.5 million in 2021/22 (2020/21: CHF 4.4 million). This is disclosed in the note on the financial result (1.4).