Forward-looking Report

Future prospects (forward-looking report)

The 2023/24 financial year has started with a normalization of the global supply chain. However, continuing concerns about the geopolitical and macroeconomic outlook remain present. Year-on-year, global GDP growth is projected to decline from 3.5% in 2022 to 3.0% in 2023 and 2024 (IMF World Economic Outlook, July 2023). With the war in Ukraine continuing, the widespread uncertainty continues to yield inflation of costs and the potential for a food crisis on a broader scale with the related risk of widespread unrest. Energy and commodity prices have dropped significantly since their peak in 2022 and supply chains normalized. While strong actions taken by authorities to contain turbulences in US and Swiss banking led to a reduction of turmoil in the financial sector, inflation is expected to remain above target for 2023 in 96 percent of economies with inflation targets. Both movements led to a decrease in headline inflation in most countries. However, strong growth of wages in labor-intense markets together with weak productivity growth, core inflation remains on a high level and showing a more gradual decline. As a consequence, central banks in Europe and the Americas have continued to increase rates while signaling further increases to come. For East Asian economies in particular meanwhile, core inflation has remained low, with the Chinese central bank cutting policy interest rates and the Bank of Japan keeping interest rates close to zero.

Global growth is expected to slow down in 2023 to 3.0%, remaining at that level in 2024. Due to a shift in composition towards domestic services, world trade growth is projected to decline significantly from 5.2% in 2022 to 2.0% in 2023 before rising again in 2024.  While the slowdown is expected to be most visible in the most advanced economies, especially in the European Union, United Kingdom and the US, Asian economies outside China continue to outperform global growth trends (IMF World Economic Outlook, July 2023).

As a globally operating company, dormakaba will always be exposed to a wide range of risks and opportunities in the regions it operates in. To optimize its risk profile, dormakaba remains focused on gaining scale and optimizing its global presence to further improve the company’s risk exposure, while leveraging business opportunities that emerge from global trends. The pursuit of the company strategy Shape4Growth including the recently announced transformation program, will set the company up to move toward a stronger focus on customer centricity driven by operational efficiency and optimal capital utilization. This gives dormakaba the capability to address increasing differentiation in its industry, fulfilling the demand for smart, seamless, and secure access solutions that not only meet increasingly rigorous sustainability criteria but leverage them for unique business opportunities.

dormakaba’s technical and commercial development will remain driven by the following fundamental industry trends:

  • The world as a whole is becoming more prosperous; the needs for security and protection that characterize the middle classes in developed countries will become the norm in ever more places (growth driver: increasing prosperity);
  • At the same time, the average life expectancy is rising steadily, which means that institutions and private homes increasingly need barrier-free solutions that allow senior citizens to move easily from room to room (growth driver: demographic change);
  • The world is becoming more urban, cities larger, and infrastructure more complex, requiring sophisticated solutions to support the seamless flow of people to where they want to go (growth driver: urbanization);
  • Buildings and land should be both easily accessible and secure from a wide spectrum of threats. Meeting these combined needs efficiently and conveniently demands a comprehensive access solution (growth driver: need for security);
  • Finally, technology influences practically every aspect of the access and security market, from digitalization and distribution channels to the networking of products in the Internet of Things. Customers expect that their experience of access solutions should integrate seamlessly with their personal digital environments (growth driver: technology).

These five trends together with the increasing demand for seamless access and sustainable solutions continue to impact all of dormakaba’s activities, starting from strategy definition and execution through product development to marketing and sales. In addition to these five megatrends, dormakaba expects access and credentialing policies across all vertical end markets to be strengthened, as well as solutions that offer a positive impact on more sustainable buildings. dormakaba is well equipped with its key products and interoperable and interconnected solutions to realize growth potential, for example in seamless and touchless access solutions. The company is also open to considering investments in the ongoing consolidation of the industry, which is likely to accelerate.

Outlook for the financial year 2023/24

The current business environment remains strongly characterized by uncertainties and a lack of visibility. Geopolitical risks continue to be at a high level, particularly in Asia and Europe (esp. from the war in Ukraine). Further increasing of interest rates in the fight against inflation might continue to slow general economic growth including new construction activities.

Based on a healthy order intake and order book at the end of 2022/23, dormakaba expects to continually improve on year-on-year basis. For 2023/24, the company expects organic growth to be in line with mid-term guidance and profitability above its 2022/23 performance.

dormakaba will remain focused on the rigorous execution of its Shape4Growth transformation which includes both growth and cost management measures such as pricing, expense management through footprint optimization and organizational efficiency.

Capital structure

Detailed information on dormakaba Holding AG’s capital structure can be found in the Corporate Governance Report 2022/23.