Consolidated financial statements Other financial information

4. Other financial information

This section provides details of the various commitments and contingencies as well as information about the associated companies, the acquisitions, and the legal subsidiaries including the Group companies' shareholdings.

4.1 Commitments and contingencies

Lease commitments

Operating lease payments are charged to income (CHF 38.5 million in 2021/22 and CHF 35.9 million in 2020/21) on a straight-line basis over the lease term. The following table shows the future minimum lease payments resulting from non-cancellable operating leases:

CHF million	Financial year ended 30.06.2022	Financial year ended 30.06.2021
Future payment commitments for operating leases	108.2	103.5
Up to 1 year	32.2	31.4
2 to 5 years	60.5	60.6
Over 5 years	15.5	11.5

Operating lease commitments mainly refer to the lease of buildings used for operational purposes.

Accounting principles

Operating lease agreements are lease agreements that do not qualify as finance leases and are not capitalized in the balance sheet.

Other commitments and contingencies

CHF million	Financial year ended 30.06.2022	Financial year ended 30.06.2021
Current endorsement liabilities	0.3	1.0
Investments committed to purchase from third parties:
Property, plant, and equipment	8.0	6.9
Intangible assets	0.6	0.6

4.2 Equity accounted investments

CHF million	Financial year ended 30.06.2022	Financial year ended 30.06.2021
Investments in associates - 30 June	5.7	5.4
Increase of investments in associates	0.0	2.0
Share of profit (loss)	0.3	0.1
Investments in associates - 1 July	5.4	3.3
Result from associates	0.3	0.1
Share of profit (loss)	0.3	0.1

Accounting principles

Investments in associates and joint ventures where dormakaba Group exercises significant influence but does not have control (i.e. usually an interest between 20% and 50%) are accounted for using the equity method of accounting. Under the equity method, investments in associated companies and joint ventures are initially recognized at cost, and the carrying amount is increased or decreased to recognize dormakaba Group’s share of the profit or loss of the associate/joint venture after the date of acquisition. Profit and loss are attributed to the owners of the parent and to the minority interests, even if this results in a negative balance. Investments in which dormakaba Group does not have significant influence (i.e. dormakaba Group’s interest is usually less than 20%) are recorded at cost.

4.3 Business combinations and divestments

Business combinations

The following table summarizes all considerations paid for businesses, as well as the assets and liabilities acquired and recognized at fair value as at the acquisition date for the full financial year 2021/22 and for the full financial year 2020/21 in comparison.

CHF million				Financial year ended 30.06.2022	Financial year ended 30.06.2021
	Fermatic	RELBDA	Others	Total	Total
Total consideration	27.0	62.3	25.1	114.4	20.5
Cash paid	26.6	52.2	20.2	99.0	19.9
Deferred payment	0.0	9.4	4.6	14.0	0.5
Acquisition-related costs	0.4	0.7	0.3	1.4	0.1
Identifiable assets and liabilities	–2.9	–5.2	4.5	–3.6	2.7
Cash and cash equivalents	2.6	2.5	3.5	8.6	1.4
Trade receivables	9.3	6.4	2.8	18.5	3.2
Inventories	2.1	6.3	1.5	9.9	0.9
Current income tax assets	0.0	0.0	0.4	0.4	0.0
Other current assets	0.9	1.4	0.1	2.4	0.8
Property, plant, and equipment	2.8	4.6	0.8	8.2	0.5
Intangible assets	0.0	0.3	0.0	0.3	0.0
Deferred income tax assets	0.0	0.9	0.1	1.0	0.2
Current borrowings	0.0	0.0	–0.1	–0.1	–0.4
Trade payables	–3.9	–4.5	–1.0	–9.4	–1.5
Current income tax liabilities	–0.1	–0.4	–0.5	–1.0	–0.3
Accrued and other current liabilities	–6.4	–3.0	–2.6	–12.0	–1.7
Provisions	–0.3	–0.2	–0.2	–0.7	0.0
Non-current borrowings	–10.0	–18.2	–0.1	–28.3	–0.4
Accrued pension costs and benefits	–0.6	–1.3	–0.2	–2.1	0.0
Deferred income tax liabilities	0.7	0.0	0.0	0.7	0.0
Goodwill	29.9	67.5	20.6	118.0	17.8

Fermatic Group

On 22 October 2021, dormakaba acquired Fermatic Group based near Paris (FR). Fermatic Group is a renowned provider of services for automatic doors and gates. The company primarily operates in the multi-housing market in the North-West of France and also serves other verticals such as offices, retail, and public buildings.

Australian Reliance Doors and Best Doors Australia Groups (RELBDA)

On 31 August 2021, dormakaba acquired the Australian Reliance Doors and Best Doors Australia Groups (RELBDA) based in eastern and southern Australia. The group of companies is a well-established provider in the Australian market with reputable brands for residential garage doors, automatic openers, industrial overhead doors, as well as related services.

Others

Further, dormakaba acquired AtiQx Holding B.V. based in Utrecht/Dordrecht (NL), MultiGlazingSystems Ltd based in Dudley, West Midlands (UK), Rovato Techniek B.V. based in LK Tiel (NL), and Solus Security Systems PvT Ltd based in Bangalore (IN).

Business divestments

The following table summarizes the considerations received as well as the net assets divested. The resulting net goodwill was recycled affecting result from sale of subsidiaries.

CHF million			Financial year ended 30.06.2022	Financial year ended 30.06.2021
	Mesker	IGS	Total	Total
Total consideration	5.9	26.3	32.2	2.6
Cash consideration	0.5	30.5	31.0	2.6
Deferred expenses / payment	6.4	–1.1	5.3	0.0
Divestment-related costs	–1.0	–3.1	–4.1	0.0
Assets and liabilities divested	13.8	22.7	36.5	2.9
Cash and cash equivalents	0.0	17.4	17.4	1.5
Trade receivables	0.0	4.3	4.3	0.7
Inventories	7.1	8.5	15.6	1.3
Other current assets	0.0	0.9	0.9	0.0
Property, plant, and equipment	6.1	13.2	19.3	0.0
Intangible assets	0.6	0.1	0.7	0.0
Non-current financial assets	0.0	0.5	0.5	0.0
Deferred income tax assets	0.0	2.2	2.2	0.0
Trade payables	0.0	–2.9	–2.9	–0.6
Accrued and other current liabilities	0.0	–1.7	–1.7	0.0
Provisions	0.0	–0.1	–0.1	0.0
Accrued pension costs and benefits	0.0	–19.7	–19.7	0.0
Amortization on goodwill - recycling 1)	48.7	2.2	50.9	0.0
Result from sale of subsidiaries 2)	–56.6	1.4	–55.2	–0.3

1) Goodwill is fully offset in equity at the date of acquisition and amortized over five years in the notes of the annual financial statements without affecting consolidated income. In order to determine the result from sale of subsidiaries, goodwill allocated to the disposed business is recognized at its original cost in the income statement.

2) Included in other operating income, net

Mesker business

On 21 June 2022, dormakaba divested its Mesker hollow metal doors business to the key principals of Trimco and Metal Manufacturing Industries (MMI). US-based Trimco is a recognized leader in the North American market for innovating, designing, and manufacturing architectural hardware solutions. MMI is the premier hollow metal doors and frames manufacturer in the Mexican market, exporting its products to Central and South America.

Interior glass systems business (IGS)

As per 31 October 2021, dormakaba divested its interior glass systems business (IGS). The purchaser is the Italian-based investment and financial group Aliante Equity Tre S.p.A. Aliante has built up an investment portfolio with other portfolio companies, with a global presence in the design and furniture market, that complement the IGS business and offer commercial synergies.

Accounting principles

Goodwill represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquired entity, and the book value as at the acquisition date of any previous equity interest in the acquired entity over the fair value of the Group’s share of the identifiable net assets acquired. Only intangible assets purchased separately are recognized as part of an acquisition. The positive or negative goodwill resulting from acquisitions is offset in equity at the date of acquisition against retained earnings.

If the purchase price contains elements that are dependent on future results, they are estimated as accurately as possible at the date of acquisition and recognized in the balance sheet. In the event of any disparities when the definitive purchase price is settled, the goodwill offset in equity is adjusted accordingly. The consequences of a theoretical capitalization and amortization of goodwill are explained in the note on the theoretical equity and goodwill movement (3.4).