Notes to the consolidated financial statements

Basis of Preparation

The consolidated financial statements of dormakaba Group (“dormakaba”) include 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 2024 until 31 December 2024 and are prepared in accordance with the rules of Swiss GAAP FER 31 (“Complementary Recommendation for Listed Public Companies”) relating to interim financial reporting (Generally Accepted Accounting Principles/ FER = Fachempfehlungen zur Rechnungslegung). The accounting policies have been applied consistently by Group companies.

The consolidated half-year report should be read in conjunc­tion with the consolidated financial statements compiled for the financial year ended 30 June 2024, 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.

Operational performance and market development are 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.

Segment Reporting

Reconciliation of operational figures to the consolidated financial statements

Business Acquisitions and Divestments

Business Acquisitions

In the period reported and in the previous year, no material acquisitions were made.

Business Divestments

dormakaba divested the South African entity dormakaba South Africa (Pty) Ltd to the local management team as per 31 December 2024. The business has contributed CHF 4.5 million to the net sales in the current financial year and generated net sales of CHF 8.5 million in the financial year ended 30 June 2024.

dormakaba divested the Entrance System Automatics (ESA) Service Business in the United Kingdom as per 30 November 2024. The service business has contributed CHF 8.0 million to the net sales in the current financial year and generated net sales of CHF 20.4 million in the financial year ended 30 June 2024.

In the previous year, no material divestments were made.

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 items excluded is summarized in the table below and the reconciliation with EBIT defined by Swiss GAAP FER is disclosed in segment reporting:

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.

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. It also includes changes in non-current financial assets and proceeds from asset sales. Cash flows relating to acquisitions and divestments are excluded.

Net Debt

Net debt describes the current borrowings and non-current liabilities minus cash and cash equivalents.

Net Working Capital

Net working capital is used by the Group to measure the efficiency in managing financial resources and complements the Groupʼs performance management. dormakaba defines net working capital as trade receivables plus inventories, minus the sum of trade payables, advances from customers, and deferred income.

Adjusted operating cash flow margin

Adjusted operating cash flow margin is calculated as the ratio of adjusted net cash from operating activities 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)

EBIT divided by capital employed (CE) results in ROCE. dormakaba bases the calculation on a 12-month rolling EBIT, adjusted for 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 sheet information is considered (31 December 2024, 30 June 2024, and 31 December 2023). For the previous year comparison, the same principles were applied.

Events after the balance sheet date

On 19 February 2025, dormakaba has signed an agreement to sell the dormakaba Kuwait for Ready Made Windows LLC (“dormakaba Kuwait”) to the local management team. Under the new ownership, the business will operate as Dormatic Kuwait.

On 5 February 2025, dormakaba has signed an agreement to acquire Montagebedrijf van den Berg B.V. (“Van den Berg”) based in Bunschoten-Spakenburg (NL). The closing date of the transaction is 1 January 2025. Van den Berg is a well-known company specializing in the maintenance, repair, and new installation of automatic door systems and adjacent products with a high exposure to the airport vertical.