Segment Access Solutions AMER

AS AMER achieved total sales of CHF 365.2 million in the first half of financial year 2021/22. Despite the challenging operating environment resulting from supply chain shortages, freight delays and periodic waves of Covid-19-related absenteeism, organic sales increased by 5.7% compared to the previous year. Growth was driven by a recovery in the US commercial construction market, and particularly in renovation and replacement. Sales in Latin America were also up on the previous year.

Growth was broad-based across Safe Locks, Door Hardware, Mechanical Key Systems, and Lodging Systems. Although the lodging business recovered from a low baseline, it is still substantially below pre-Covid levels. Order intake for the Entrance Systems business remains healthy and is supported by key project wins. One example is Alvarado’s contract to provide a touchless access solution for ticket holders attending the Super Bowl in February 2022 (SoFi Stadium, Los Angeles).

Adjusted EBITDA increased to CHF 61.0 million (previous year CHF 60.1 million) with an adjusted EBITDA margin of 16.7% (previous year 17.7%). The margin was impacted by higher raw material and freight costs as well as labor cost inflation and a negative product mix, which more than offset higher volumes and sales price increases. The hollow metal door business (Mesker) continued to have a negative effect of 230 basis points (previous year 140 basis points) on the segment’s adjusted EBITDA margin. Due to the unsatisfactory performance of this business, management announced plans on 15 November 2021 to divest Mesker and has started a structured divestment process.

For the second half of financial year 2021/22, AS AMER expects continued organic growth based on a healthy order backlog, stable order intake and a continuation of the gradual recovery in the US commercial market that was already evident in the first half of 2021/22.
Growth will be supported by several contract wins, including secure Access Automation Solutions for distribution centers run by several significant eCommerce and bricks & mortar retailers in the US, a project at a National Aeronautics & Space Administration (NASA) facility in Texas, and an agreement to provide wireless server rack access devices for the data center of a leading social media platform. However, visibility continues to be limited due to the persistent scarcity of certain raw materials, especially electronic components, as well as to extraordinary freight delays and project delays resulting from labor shortages. Going forward, therefore, there will be a particular focus on continued sales price increases to offset for higher raw material, freight and labor costs. Several rounds of price increases have already been announced for the beginning of the second half of 2021/22.

Future growth will be driven by innovative products and solutions. One promising project is the development of self-screening security lanes for US airports. dormakaba is working in collaboration with Vanderlande and Rohde & Schwarz to automate passenger flow through security checkpoints. The initiative is part of a US Department of Homeland Security program to improve efficiency while processing passengers through airport security.

On 15 November 2021 dormakaba announced its new strategy Shape4Growth, which for the segment includes a turnaround plan as well as an annual growth target of 4% to 6% and an improvement in the adjusted EBITDA margin by 400 to 500 basis points over the coming three years. In line with the Group-wide approach, AS AMER has initiated a transformation process in several workstreams, such as growth in global core products, vertical market solutions, commercial excellence, procurement and business system harmonization.

Key figures – segment AS AMER

Segment sales (CHF million) – AS AMER