Despite the level of uncertainty that arose over the course of 2022/23, relating in particular to inflation and the effects stemming from the ongoing war in Ukraine, dormakaba expects macro-economic factors to remain stable for the commercial construction industry.
In the 2023/24 financial year, the company expects continued organic growth in the Americas based on healthy order intake, a strong order book, and continued pricing activities. Growth will be further supported by increased focus on specification, strong project pipelines with major brands, and a beneficial market development in K-12 education, Government, Multi-housing and Hospitality verticals.
For Region Asia Pacific, the company expects moderate growth in the financial year 2023/24. China will eventually emerge from the negative impacts resulting from Covid-19 and related strict policies and is expected to return gradually to normal growth of business. The Pacific market has a strong pipeline and predicts continued growth in healthcare supported by a strong commercial market with refurbishments and repurposing of buildings. India will continue its focus on infrastructure development supported by strong economic growth indicators.
The uncertain economic environment in Europe limits forward visibility. However, the outlook across Europe & Africa remains broadly positive with order intake surpassing sales revenue during the year, resulting in a high single-digit increase of orders at hand. As Germany, Switzerland, and UK & Ireland represent three of the five focus countries, they will benefit from additional initiatives under the transformation program, announced on 3 July 2023, adding to the ongoing initiatives of sales excellence, price realization, and consolidation of smaller countries as well as operational efficiency gains. Talent acquisition remains a significant issue in many European markets which could hinder dormakaba's ability to capitalize on the healthy order book and pipeline.
Key & Wall Solutions and OEM expects continued organic sales growth in 2023/24 based on a good order intake and backlog. The order book of Movable Walls shows a strong backlog in Europe and the Americas, remaining at a record level. Key Systems sees weak demand for Key Cutting Machines which may continue in the foreseeable future. Overall, the segment expects Business Unit Key Systems to remain stable and Business Unit Movable Walls to continue growing.
The company therefore expects that 2023/24 financial year will show organic growth in line with its mid-term target range of 3-5% along with a continuation of the sequential improvement in its adjusted EBITDA margin.