The financial year 2022/23 was characterized by strong organic growth which was most pronounced in the Regions Americas and Europe & Africa, and the segment Key & Wall Solutions. Region Asia Pacific was still impacted by slower development in China due to Covid-related lockdowns and cash constraints affecting the construction industry. While supply chains recovered, inflationary pressure remained high in Europe and the US. However, dormakaba was able to balance these headwinds showing a sequential improvement in profitability over the year, especially from the first to the second half of the financial year.
dormakaba increased absolute net sales by 3.3% to CHF 2,848.8 million in 2022/23 (previous year: CHF 2,756.9 million); organic sales increased by 8.4%. The impact on sales growth from acquisitions and divestments was -0.5% and translation exchange effects were -4.0%. Absolute adjusted EBITDA increased by 3.4% to CHF 384.8 million (previous year: CHF 372.3 million), the adjusted EBITDA margin was at 13.5% (previous year: 13.5%). Net profit at CHF 88.5 million (previous year: CHF 38.8 million (restated)) was impacted by a change in goodwill accounting, as well as by expenses linked to strategy implementation including the conception of the transformation program announced on 3 July 2023. For more information, please refer to the Consolidated Financial Statements Chapter 5.1 “Change in accounting principles and restatement of previous period” section of this report.
The Nomination and Compensation Committee (NCC) performed its regular activities throughout the financial year, such as proposing compensation for the members of the BoD and EC, as well as the preparation of the Compensation Report and the binding say-on-pay votes at the Annual General Meeting (AGM).
In addition, as noted in the 2021/22 Compensation Report, during the reporting year the NCC implemented the following changes to the Compensation Architecture for EC members:
In the reporting year, the NCC continued the review of the compensation programs for EC members to ensure that they best align with the strategic direction of the company in the context of the Shape4Growth strategy for the period 2022 to 2027 and consider shareholder’s feedback based on a targeted engagement outreach in 2022. As from the financial year 2023/24, it is planned that the LTI compensation will include ESG-related targets to reflect the increasing importance of sustainability.
The STI and LTI programs are described in detail in the section “Compensation Architecture for the EC” of this Compensation Report, which also includes an introduction to the changes foreseen for the financial year 2023/24. Following the restructuring of STI and LTI, the disclosure of STI and LTI payout as well as the respective performance outcomes have been improved to increase the level of transparency.
At the upcoming AGM, our shareholders will be asked to prospectively approve the aggregate maximum amounts of compensation of the BoD for the period until the following AGM and of the EC for the financial year 2024/25. Further, our shareholders will have the opportunity to express their opinion about our compensation system and the compensation awarded to the BoD and to the EC by way of a consultative vote on the Compensation Report 2022/23 at the AGM 2023.
At the AGM 2022, binding votes were conducted on the aggregate maximum compensation amounts for the BoD and for the EC, as well as a consultative vote on the Compensation Report. The shareholders approved the maximum compensation amounts for the BoD with 91% (prior year: 97%) and the EC with 97% (prior year: 98%). The consultative vote on the Compensation Report received an approval rate of 94% (prior year: 87%). This positive voting outcome shows that the active dialogue with investors was fruitful and that shareholders endorse the compensation system in place at dormakaba. We would like to thank our shareholders for their trust and support.
Looking ahead, we will continue to maintain an open and regular dialogue with our shareholders and their representatives. We will also continue to assess and review our compensation programs regularly to ensure that they are fulfilling their purpose in the evolving context in which the company operates and are aligned with the interests of our shareholders.