Half-year Report 2018/19
The consolidated financial statements of dormakaba Group (“dormakaba”) includes the operations of dormakaba Holding AG and all direct and indirect subsidiaries in which dormakaba controls more than 50 % of votes or otherwise has the power to govern the financial and operating policies. Investments in associates where dormakaba exercises significant influence, but does not have control (normally with an interest between 20 % and 50 %), and in joint ventures are considered for using the equity method of accounting.
The unaudited consolidated half-year financial statements cover the period from 1 July 2018 until 31 December 2018 and are prepared in accordance with the rules of the Swiss GAAP FER 31 (“Complementary Recommendation for Listed Public Companies”) relating to interim financial reporting (Generally Accepted Accounting Principles / FER = Fachempfehlungen zur Rechnungslegung).
The consolidated half-year report should be read in conjunction with the consolidated financial statements complied for the financial year ended 30 June 2018, as it represents an update of the last complete financial statements and therefore does not contain all information and disclosures required in year-end consolidated financial statements. The consolidated financial statements are prepared in accordance with Swiss GAAP FER and comply with the provisions of the listing rules of the SIX Swiss Stock Exchange as well as the Swiss company law.
The business development for the period from 1 July 2018 until 31 December 2018 is described in the chapter “Business performance” and should be read in conjunction with this consolidated half-year report.
Income tax expense is recognized based upon the best estimate of the weighted average annual income tax rate expected for the full financial year. The preparation of the consolidated half-year financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, and disclosure of contingent liabilities at the date of the consolidated half-year financial statements. If in future such estimates and assumptions, which are based on management’s best judgment at the date of the consolidated half-year financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the reporting period in which the circumstances change.
dormakaba treats transactions with minority interests that do not result in a loss of control as transactions with equity owners of dormakaba. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and minority interests to reflect their relative interests in the subsidiary.
In the period reported, no material acquisitions were made.
In December 2018 dormakaba divested parts of the US Door Hardware Service Business in the AS AMER segment due to insufficient profitability expectations.
The 40% shareholding in ISEO was divested on 15 October 2018. Italy-based ISEO is a manufacturer of security products such as cylinders, master key systems, locks and panic hardware mainly for the European market. Former Dorma had acquired a stake of 40% in ISEO in December 2012 to strengthen its business with an extended product range. With the merger to dormakaba and its resulting comprehensive product range, the strategic position was re-assessed, and led to the divestment decision.
The following table summarizes the consideration paid for the business and the amounts of the net assets acquired recognized at fair value at the acquisition date. The resulting goodwill was recognized in equity.
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in CHF million |
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Klaus Group |
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Cambaum Group |
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Kilargo |
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Skyfold |
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other |
|
Financial year ended 30.06.2018 |
Consideration as per acquisition date |
|
09.05.2018 |
|
26.04.2018 |
|
17.07.2017 |
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13.07.2017 |
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Cash paid |
|
6.3 |
|
20.2 |
|
24.2 |
|
82.5 |
|
1.5 |
|
134.7 |
Acquisition-related costs |
|
0.3 |
|
2.0 |
|
0.2 |
|
0.6 |
|
|
|
3.1 |
Deferred payment |
|
1.7 |
|
4.9 |
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|
|
|
|
|
|
6.6 |
Total consideration |
|
8.3 |
|
27.1 |
|
24.4 |
|
83.1 |
|
1.5 |
|
144.4 |
Assets and liabilities acquired |
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Cash and cash equivalents |
|
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0.9 |
|
5.2 |
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6.1 |
Trade receivables |
|
1.7 |
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|
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3.0 |
|
5.3 |
|
|
|
10.0 |
Inventories |
|
2.2 |
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|
|
2.2 |
|
1.8 |
|
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|
6.2 |
Current income tax assets |
|
0.3 |
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0.3 |
|
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|
0.6 |
Other current assets |
|
0.4 |
|
1.2 |
|
0.1 |
|
0.9 |
|
0.1 |
|
2.7 |
Property, plant and equipment |
|
0.8 |
|
0.2 |
|
1.1 |
|
8.1 |
|
|
|
10.2 |
Intangible assets |
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|
|
|
|
|
|
0.1 |
|
0.3 |
|
0.4 |
Non-current financial assets |
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|
0.1 |
|
|
|
0.1 |
Deferred income tax assets |
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|
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|
0.3 |
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0.3 |
Current borrowings |
|
–0.2 |
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–2.7 |
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–2.9 |
Trade payables |
|
–0.9 |
|
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–0.8 |
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–0.7 |
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–0.4 |
|
–2.8 |
Current income tax liabilities |
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|
|
|
|
–0.5 |
|
–0.2 |
|
|
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–0.7 |
Accrued and other current liabilities |
|
–3.6 |
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–0.3 |
|
–0.7 |
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–8.0 |
|
|
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–12.6 |
Provisions |
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|
|
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–0.1 |
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|
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–0.1 |
Non-current borrowings |
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–2.4 |
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–2.4 |
Accrued pension costs and benefits |
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|
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–0.4 |
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|
|
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|
–0.4 |
Deferred income tax liabilities |
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|
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–1.0 |
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–1.1 |
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–2.1 |
Other non-interest bearing liabilities |
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–0.1 |
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|
|
|
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–0.1 |
Total identifiable net assets |
|
–1.7 |
|
1.0 |
|
2.4 |
|
11.9 |
|
–1.1 |
|
12.5 |
Goodwill |
|
10.0 |
|
26.1 |
|
22.0 |
|
71.2 |
|
2.6 |
|
131.9 |
Total consideration |
|
8.3 |
|
27.1 |
|
24.4 |
|
83.1 |
|
1.5 |
|
144.4 |
On 9 May 2018, dormakaba acquired Klaus Group, based in Lima (Peru). With its key blanks as well as other brass products Klaus Group is a market leader for key systems in South America.
On 26 April 2018, dormakaba acquired the Commercial Building Physical Access Solutions (PAS) business from Beijing-based Cambaum Group. The integration of Cambaum Group's business team, products and service solution offering strengthens dormakaba's position in the smart commercial buildings market within a number of fast growing major cities in China.
On 17 July 2017, dormakaba acquired Kilargo Pty Ltd, based in Brisbane (Australia). Kilargo is one of the market leaders in Australia for commercial door seals and complements dormakaba’s integrated portfolio of products, solutions, and services in the Pacific region.
On 13 July 2017, dormakaba acquired Skyfold Investment Inc., based in Montreal (Canada). The company, with its well-known brand, was the first worldwide to develop vertical folding walls. Skyfold is a provider of automated vertical folding wall systems with a strong presence in the North American market. With this acquisition dormakaba enhances its product portfolio, following the industry trend towards automated systems.
The following table summarizes the consideration paid and received as well as the net assets divested. The resulting net goodwill was recognized in equity.
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in CHF million |
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Dorset Kaba |
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GMT |
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other |
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Financial year ended 30.06.2018 |
Consideration as per divestment date |
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09.04.2018 |
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29.09.2017 |
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Cash consideration received |
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18.6 |
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27.2 |
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–1.1 |
|
44.7 |
Purchase price for minority shares paid |
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–8.3 |
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–8.3 |
Divestment-related costs paid |
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–0.2 |
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–1.0 |
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–1.2 |
Total consideration |
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10.1 |
|
26.2 |
|
–1.1 |
|
35.2 |
Assets and liabilities divested |
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Cash and cash equivalents |
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19.4 |
|
3.3 |
|
22.7 |
Trade receivables |
|
5.6 |
|
5.5 |
|
|
|
11.1 |
Inventories |
|
3.5 |
|
6.7 |
|
2.4 |
|
12.6 |
Other current assets |
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0.1 |
|
0.7 |
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|
0.8 |
Property, plant and equipment |
|
1.6 |
|
7.2 |
|
4.1 |
|
12.9 |
Intangible assets |
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|
0.1 |
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|
0.1 |
Non-current financial assets |
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|
0.3 |
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0.3 |
Trade payables |
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–1.8 |
|
–4.6 |
|
–0.3 |
|
–6.7 |
Current income tax liabilities |
|
–0.2 |
|
–0.1 |
|
|
|
–0.3 |
Accrued and other current liabilities |
|
–0.3 |
|
–3.0 |
|
–0.4 |
|
–3.7 |
Provisions |
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|
|
–0.9 |
|
|
|
–0.9 |
Accrued pension costs and benefits |
|
–0.3 |
|
|
|
–0.3 |
|
–0.6 |
Total net assets divested |
|
8.2 |
|
31.3 |
|
8.8 |
|
48.3 |
Goodwill, net |
|
1.9 |
|
–5.1 |
|
–9.9 |
|
–13.1 |
Total consideration |
|
10.1 |
|
26.2 |
|
–1.1 |
|
35.2 |
As per 9 April 2018 dormakaba and the Indian joint venture partner have agreed to divide their existing shareholding in Dorset Kaba among them, thus dissolving the joint venture that was initiated by former Kaba Group in 2007 to gain a foothold in the attractive Indian market.
In this regard the minority shares of 26% owned by the Indian partner Dorset Industries Pvt Ltd. were purchased and the net assets related to the local door hardware business sold in return. The activities in the dormakaba's core business (mainly lodging products, physical access systems) remain within the dormakaba Group.
GMT Hardware Co. Ltd. (Shanghai/China) was divested on 29 September 2017. GMT offers commercial door hardware products, such as floor hinges for glass doors and door fittings, in China and became member of dormakaba as part of the acquisition of Stanley Black&Decker’s mechanical security business in February 2017. Because of dormakaba's existing portfolio of businesses in Asia as well as profitability prospects of GMT, it was concluded to divest the business.
DORMA Beschlagtechnik (Velbert/DE) was sold as at 10 July 2017 to Flacks Group, Miami (Florida/USA). The divested net assets amounted to CHF 9.4 million. A contingent liability related to this transaction depending on the future development of the business remains with dormakaba.
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Access Solutions AMER |
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Access Solutions APAC |
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Access Solutions DACH |
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Access Solutions EMEA |
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Eliminations |
|
Access Solutions TOTAL |
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Key & Wall Solutions |
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Other |
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Corporate |
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Eliminations |
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Group |
||||||||||||||||||||||
in CHF million |
|
Reporting half-year ended 31.12.2018 |
|
Reporting half-year ended 31.12.2017 |
|
Reporting half-year ended 31.12.2018 |
|
Reporting half-year ended 31.12.2017 |
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Reporting half-year ended 31.12.2018 |
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Reporting half-year ended 31.12.2017 |
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Reporting half-year ended 31.12.2018 |
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Reporting half-year ended 31.12.2017 |
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Reporting half-year ended 31.12.2018 |
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Reporting half-year ended 31.12.2017 |
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Reporting half-year ended 31.12.2018 |
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Reporting half-year ended 31.12.2017 |
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Reporting half-year ended 31.12.2018 |
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Reporting half-year ended 31.12.2017 |
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Reporting half-year ended 31.12.2018 |
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Reporting half-year ended 31.12.2017 1) |
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Reporting half-year ended 31.12.2018 |
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Reporting half-year ended 31.12.2017 |
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Reporting half-year ended 31.12.2018 |
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Reporting half-year ended 31.12.2017 |
|
Reporting half-year ended 31.12.2018 |
|
Reporting half-year ended 31.12.2017 |
Net sales third parties |
|
388.1 |
|
395.6 |
|
222.6 |
|
224.1 |
|
266.5 |
|
260.6 |
|
322.1 |
|
315.8 |
|
0.0 |
|
0.0 |
|
1,199.3 |
|
1,196.1 |
|
190.1 |
|
180.2 |
|
7.1 |
|
24.3 |
|
0.0 |
|
0.0 |
|
0.0 |
|
0.0 |
|
1,396.5 |
|
1,400.6 |
Intercompany sales |
|
14.0 |
|
14.9 |
|
13.9 |
|
14.0 |
|
163.5 |
|
160.3 |
|
59.0 |
|
60.0 |
|
–246.9 |
|
–245.2 |
|
3.5 |
|
4.0 |
|
7.2 |
|
5.5 |
|
1.4 |
|
1.6 |
|
0.0 |
|
0.0 |
|
–12.1 |
|
–11.1 |
|
0.0 |
|
0.0 |
Total sales |
|
402.1 |
|
410.5 |
|
236.5 |
|
238.1 |
|
430.0 |
|
420.9 |
|
381.1 |
|
375.8 |
|
–246.9 |
|
–245.2 |
|
1,202.8 |
|
1,200.1 |
|
197.3 |
|
185.7 |
|
8.5 |
|
25.9 |
|
0.0 |
|
0.0 |
|
–12.1 |
|
–11.1 |
|
1,396.5 |
|
1,400.6 |
Operating profit (EBIT) |
|
78.2 |
|
74.3 |
|
32.9 |
|
29.8 |
|
69.9 |
|
65.7 |
|
23.4 |
|
21.8 |
|
–0.9 |
|
–2.8 |
|
203.5 |
|
188.8 |
|
24.6 |
|
21.8 |
|
0.2 |
|
2.3 |
|
–40.2 |
|
–34.8 |
|
0.0 |
|
0.0 |
|
188.1 |
|
178.1 |
in % of sales |
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19.4% |
|
18.1% |
|
13.9% |
|
12.5% |
|
16.3% |
|
15.6% |
|
6.1% |
|
5.8% |
|
0.4% |
|
1.1% |
|
16.9% |
|
15.7% |
|
12.5% |
|
11.7% |
|
2.5% |
|
8.8% |
|
0.0% |
|
0.0% |
|
0.0% |
|
0.0% |
|
13.5% |
|
12.7% |
Depreciation and amortization |
|
6.5 |
|
6.6 |
|
3.9 |
|
3.7 |
|
8.6 |
|
8.1 |
|
6.6 |
|
6.9 |
|
0.0 |
|
0.0 |
|
25.6 |
|
25.3 |
|
4.4 |
|
4.3 |
|
0.1 |
|
0.4 |
|
4.8 |
|
2.8 |
|
0.0 |
|
0.0 |
|
34.9 |
|
32.8 |
Operating profit before depreciation and amortization (EBITDA) |
|
84.7 |
|
80.9 |
|
36.8 |
|
33.5 |
|
78.5 |
|
73.8 |
|
30.0 |
|
28.7 |
|
–0.9 |
|
–2.8 |
|
229.1 |
|
214.1 |
|
29.0 |
|
26.1 |
|
0.3 |
|
2.7 |
|
–35.4 |
|
–32.0 |
|
0.0 |
|
0.0 |
|
223.0 |
|
210.9 |
in % of sales |
|
21.1% |
|
19.7% |
|
15.6% |
|
14.1% |
|
18.3% |
|
17.5% |
|
7.9% |
|
7.6% |
|
0.4% |
|
1.1% |
|
19.0% |
|
17.8% |
|
14.7% |
|
14.1% |
|
3.3% |
|
10.4% |
|
0.0% |
|
0.0% |
|
0.0% |
|
0.0% |
|
16.0% |
|
15.1% |
Depreciation and amortization |
|
|
|
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|
|
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|
|
|
|
|
|
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|
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|
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|
–34.9 |
|
–32.8 |
Result from associates |
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|
3.1 |
|
1.3 |
Financial expenses |
|
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|
–22.5 |
|
–24.7 |
Financial income |
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|
1.4 |
|
0.9 |
Profit before taxes |
|
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|
|
170.1 |
|
155.6 |
Operating assets |
|
349.1 |
|
341.6 |
|
232.3 |
|
241.5 |
|
341.0 |
|
337.9 |
|
323.4 |
|
338.0 |
|
–15.5 |
|
–17.8 |
|
1,230.3 |
|
1,241.2 |
|
214.9 |
|
206.8 |
|
13.1 |
|
14.4 |
|
78.4 |
|
36.8 |
|
0.0 |
|
0.0 |
|
1,536.7 |
|
1,499.2 |
Operating liabilities |
|
–108.3 |
|
–104.0 |
|
–107.6 |
|
–101.5 |
|
–314.0 |
|
–362.6 |
|
–137.2 |
|
–146.3 |
|
0.0 |
|
0.0 |
|
–667.1 |
|
–714.4 |
|
–82.0 |
|
–83.6 |
|
–2.9 |
|
–2.5 |
|
–41.4 |
|
–26.4 |
|
0.0 |
|
0.0 |
|
–793.4 |
|
–826.9 |
Net operating assets |
|
240.8 |
|
237.6 |
|
124.7 |
|
140.0 |
|
27.0 |
|
–24.7 |
|
186.2 |
|
191.7 |
|
–15.5 |
|
–17.8 |
|
563.2 |
|
526.8 |
|
132.9 |
|
123.2 |
|
10.2 |
|
11.9 |
|
37.0 |
|
10.4 |
|
0.0 |
|
0.0 |
|
743.3 |
|
672.3 |
Capital expenditure |
|
7.5 |
|
8.3 |
|
4.9 |
|
8.0 |
|
14.4 |
|
18.0 |
|
5.0 |
|
6.2 |
|
0.0 |
|
0.0 |
|
31.8 |
|
40.5 |
|
4.8 |
|
4.3 |
|
0.4 |
|
0.3 |
|
8.2 |
|
10.9 |
|
0.0 |
|
0.0 |
|
45.2 |
|
56.0 |
Average number of full-time equivalent employees |
|
2,915 |
|
3,136 |
|
3,328 |
|
4,001 |
|
3,475 |
|
3,530 |
|
3,383 |
|
3,366 |
|
– |
|
– |
|
13,101 |
|
14,033 |
|
2,288 |
|
2,116 |
|
68 |
|
293 |
|
344 |
|
307 |
|
– |
|
– |
|
15,801 |
|
16,750 |
1) The divested GMT commercial door hardware business, acquired within Best Access Solutions in financial year 2016/17, is disclosed in segment "Other" to ensure a fair presentation of the operational main segment.
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