Segment Key & Wall Solutions

Key & Wall Solutions generated total sales of CHF 174.3 million in the first half of financial year 2021/22. Organic sales grew by 2.6% year-on-year.

The segment consists of the two Business Units Key Systems and Movable Walls, which recorded very different financial performances for the reporting period.

Business Unit Key Systems posted 9.9% organic sales growth in the half-year under review due to good demand in all business lines, including Keys, Key Cutting Machines, and Automotive Solutions. The rise was accentuated by the low baseline from the previous year, when demand in major markets, including Italy, India, and Latin America, was negatively impacted by Covid-19 regulations that led to closed key shops and regional lockdowns in many countries across the Business Unit.

Organic sales for Business Unit Movable Walls were below the previous year (–6.7%). This is because the release of orders continues to be delayed, while some projects could not be finalized due to the limited availability of labor and materials across the construction market. However, the order backlog for Movable Walls is at a record level and order entry remains strong.

Adjusted EBITDA for Key & Wall Solutions was at CHF 22.3 million, down by 16.2% compared to the previous year. The adjusted EBITDA margin for the segment was 12.8% (previous year 15.7%).

Business Unit Key Systems was able to offset higher raw material and freight costs with higher sales prices, thus improving its adjusted EBITDA margin to 14.8% (previous year 14.5%).

The adjusted EBITDA margin at Business Unit Movable Walls was impacted by lower sales volumes as well as higher raw material and freight costs, pushing it down to 9.9% from the previous year’s 17.3%. The project-driven business faces headwind due to contract durations and a more pronounced time gap between raw material price increases and higher sales prices. As a result, the business was negatively impacted in the first half of 2021/22 by the strong increase in raw material costs. Going forward, we expect an improvement thanks to higher sales prices for new projects. This will contribute to higher gross margins.

Assuming no further major disruptions related to Covid-19 and no further deterioration of the supply chain, Key & Wall Solutions expects moderate organic sales growth for the second half of 2021/22. Both Business Units will continue to work on raising sales prices to compensate for higher energy, raw material and freight costs as well as labor cost inflation. Additionally, the segment expects to benefit from the initiatives it is currently taking in procurement and sales excellence as part of the new strategy Shape4Growth.

Growth in the second half of 2021/22 will be driven by both a record order backlog in Movable Walls and good demand for Key Systems in major regions and markets.

Sales at Key Systems will also continue to be driven by innovative new products like the Unocode F Series, a new platform of five models of high-end electronic key cutting machines that was launched successfully in the second half of 2020/21. For Movable Walls, growth potential is expected from new cost-effective automated movable walls as well as from the unique portfolio of horizontal and vertical movable walls, which offers competitive advantages.

Key figures – segment Key & Wall Solutions

Segment sales (CHF million) – Key & Wall Solutions