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.

Due to the war in Ukraine and geopolitical tensions, the comprehensive crisis management measures initiated by the Group Executive Board in financial year 2019/20 were continued. Measures are focusing on the net working capital management, which also includes strict credit management and collection discipline on the trade receivables as well as restrictions on capital expenditures. The restrictive measures were weighed against generating sales with customers and the need for safety stock to ensure supply capability in the face of inflationary pressure on raw material prices and increased transport costs. Daily monitoring of the liquidity and as well as the financial debt status on Group level, including financial covenants and undrawn credit facilities, was also continued.

Borrowings and other financial liabilities

Credit facility

As of 30 June 2023, short-term bank loans and overdrafts amount to CHF 110.0 million (2021/22: CHF 473.4 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 reported EBITDA rolling 12 months). As of 30 June 2023 and throughout the 2022/23 financial year, dormakaba complied with the financial covenant.

In October 2022, a new bond in the amount of CHF 275 million was issued with an interest rate of 3.75% and a duration of 5 years. With the collected funds and own cash, the CHF 300 million credit facility “bridge to bond”, secured in June 2022, was fully repaid.

Net debt

Disclosed below are the corresponding key figures as at 30 June 2023 and 30 June 2022, respectively, including the maturities.

The interest expenses for 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 (1.5).

Bonds

As per 14 October 2022, dormakaba Finance AG, a Group company of dormakaba Holding AG, issued a new Swiss domestic bond worth CHF 275 million at an interest rate of 3.75% and a maturity of 5 years (ISIN CH1206367497). The CHF 320 million issued by dormakaba Finance AG in October 2017 will mature in October 2025 (ISIN CH0384629892).

The interest expenses for the bonds amount to CHF 10.6 million in 2022/23 (2021/22: CHF 3.5 million). This is disclosed in the note on the financial result (1.5).