5.2 Alternative performance measures (APM)

Some of the key figures used by dormakaba to measure financial performance are not defined by Swiss GAAP FER. The comparability of these figures with those of other companies might be limited. Explanations and reconciliations of these APMs are disclosed below.

EBITDA and EBIT adjusted by items affecting comparability (IAC)

Earnings before interest, taxes, depreciation, and amortization (EBITDA) corresponds to the operating result (EBIT) before depreciation and amortization. By adjusting EBITDA and EBIT for items affecting comparability (IAC), transparency is further increased and the comparability of the Groupʼs operational performance on a period-to-period basis is improved.

IACs are defined as significant costs and income that, because of their exceptional nature, cannot be viewed as inherent to the Groupʼs underlying performance. The content of these excluded items is summarized in the table below, and the reconciliation with EBIT defined by Swiss GAAP FER is disclosed in the note on the segment reporting (1.1).

Reorganization and restructuring expenses relate to dormakabaʼs transformation under the Shape4Growth strategy with the three value drivers emphasizing elevate performance, reduce complexity, and innovate & grow. These initiatives include the consolidation of the global production footprint, supplier base optimization, and the expansion of shared service centers. The program also encompasses commercial transformation efforts aimed at enhancing commercial productivity by automating processes and simplifying customer interactions. Further measures include streamlining the product portfolio, harmonizing ERP systems, and optimizing IT infrastructure to drive efficiency and innovation. The transformation programs were publicly announced on 3 July 2023 and 20 November 2024.

Other exceptional items include significant revaluation gains or losses, property sales, and other material non-recurring items not inherent to the Group’s core performance. Amortization, primarily of goodwill, is treated as IAC to ensure comparability with historical EBIT and other financial statements without goodwill amortization.

Capital expenditure

Capital expenditure (Capex) consists of the additions in property, plant, and equipment and the additions of intangible assets excluding goodwill.

Free cash flow

Free cash flow represents net cash from operating activities, adjusted for investments in property, plant, equipment, and intangible assets, as well as proceeds from their sales. Cash flows relating to acquisitions, divestments, and changes in non-current financial assets are excluded.

Adjusted operating cash flow margin

Adjusted operating cash flow margin is calculated as the ratio of net cash from operating activities (NCOA), adjusted for items affecting comparability (IAC) paid, to net sales.

Organic sales growth

Organic growth in sales is calculated by adjusting the current year’s sales for acquisition impact and comparing them to the previous year’s sales, adjusted for currency translations and divestment impact.

The relative changes resulting from translation exchange differences and impacts from divestment are calculated based on the total sales for the previous period. The relative changes resulting from acquisition and organic sales growth are calculated based on the total sales for the previous year, adjusted for the effects of translation exchange differences and impacts from divestment.

Return on capital employed (ROCE) and net working capital (NWC)

Return on capital employed (ROCE) is used to assess the Group’s efficiency in generating operating profit from capital employed. Net working capital (NWC) is used to assess the segments’ efficiency in managing financial resources. Both measures complement the Group’s performance management framework. ROCE is calculated as adjusted EBIT for the rolling 12-month period divided by average capital employed (CE). Adjusted EBIT excludes items affecting comparability (IAC). CE equals the sum of net working capital, property, plant and equipment, and intangible assets excluding goodwill. For the calculation, the average of the last three published balance sheetsʼ information is considered (30 June 2026, 31 December 2025, and 30 June 2025). The same principles were applied for the previous year comparison. dormakaba defines net working capital as trade receivables plus inventories, minus the sum of trade payables, advances from customers, and deferred income.