Sales up 14.7% to CHF 551.4 million
Strong organic growth at Group level: 9.2% – positive contribution from all divisions
EBITDA margin of 15.5% is within guidance
Solid balance sheet; equity ratio of 36.4% above the target of 20.0%
Currency: Limited currency transaction risk since foreign currency income and costs occur largely in the same currency regions
Guidance for full-year organic growth increased
Kaba Group saw its consolidated sales rise during the period under review, by 14.7% to CHF 551.4 million, with strong organic growth of 9.2%. All four divisions contributed to this excellent result.
Higher profitability and consolidated result
Kaba also improved its profitability during the period under review. EBITDA went up 15.2% to CHF 85.7 million (prior year: CHF 74.4 million). Because EBITDA rose at roughly the same rate as sales, the EBITDA margin remained the same as in the prior year at 15.5%. Kaba’s consolidated profit for the period under review was CHF 50.2 million (prior year: CHF 44.0 million). Earnings per share increases by 12.9% to CHF 13.10 (prior year: CHF 11.60).
Market position strengthened by organic growth and acquisitions
In Europe, ADS EMEA grew faster than the market. The newly created ADS AP division was still unable to exploit its full market potential, though having taken a majority stake in Dorsët Kaba, it benefited from the satisfactory market environment in India. Driven by an excellent performance in the hotel locking systems sector, ADS Americas benefitted from the healthy state of the economy in North America to reinforce its market position. Key Systems profited from a very good performance in the fast growing markets of South America and Asia, as well as from an unexpected surge in demand from the automotive industry, though this is unlikely to be repeated in the second half of the financial year.
Kaba also successfully made three acquisitions during the period under review: the increase to a majority stake in the Dorsët Kaba (India) joint venture; the acquisition of Keyscan Inc. (Canada); as well as Advanced Diagnostics Ltd. (UK) and Advanced Diagnostics USA Inc. (USA).
The ADS EMEA division posted good results for the period under review. Consolidated sales rose 7.5% to CHF 261.4 million (prior year: CHF 243.1 million). In local currency, sales increased by 9.1% (CHF 21.8 million, converted).
EBITDA increased 11.7% to CHF 47.0 million (prior year: CHF 42.1 million) and the EBITDA margin improved accordingly to 18.0% (prior year: 17.3%). ADS EMEA is on a growth path, and investments in market development, innovation and infrastructure are starting to pay off.
The newly created ADS AP division reported an unsatisfactory result for the period under review and failed to exploit its full market potential. Overall, its consolidated sales improved 33.9% to CHF 74.6 million (prior year: CHF 55.7 million). In local currency, sales went up by 8.0% (CHF 4.5 million, converted).
EBITDA reached CHF 1.3 million (prior year: CHF 2.8 million), giving an EBITDA margin of 1.7% (prior year: 4.9%). This low profitability is due to insufficient operational efficiency, but also to the targeted investments made in building up the division. Since November 2014, the new management team has prioritised implementation of plans to improve efficiency and foster growth.
The ADS Americas division achieved a good result for the period under review. Overall, the division's consolidated sales rose by 17.0% to CHF 128.0 million (prior-year: CHF 109.4 million). In local currency, sales went up by 5.1% (CHF 5.7 million, converted).
EBITDA increased to CHF 34.7 million (prior year: CHF 31.2 million), while the EBITDA margin fell slightly to 27.1% (prior year: 28.5%). This fall can be attributed to changes in the product mix and to costs associated with the integration of recently acquired companies.
The Key Systems division achieved an excellent result in the period under review. Overall, its consolidated sales improved 19.2% to CHF 105.5 million (prior year: CHF 88.5 million). In local currency, sales went up by 16.3% (CHF 14.5 million, converted).
Profitability, which was already high, increased even more. EBITDA reached CHF 18.8 million (prior year: CHF 13.9 million), meaning that the EBITDA margin, which was already very good for a volume business, improved to 17.9% (prior year: 15.7%).
Total assets came to CHF 682.6 million as at 31.12.2014 (31.12.2013: CHF 630.4 million*). Kaba Group reported net debt of CHF 93.0 million (prior year: net cash of CHF 6.8 million). This year-on-year change is mainly due to the financing of the three acquisitions made during the period under review. The equity ratio of 36.4% (31.12.2013: 46.0%*) remains well above the target range of 20.0%.
Impact of removal of minimum Swiss franc exchange rate
Thanks to its decentralized structure, with local production sites in each market and currency region, Kaba Group's currency transaction risks are limited; translation risks arise when foreign currencies are converted into the Group reporting currency, the Swiss franc.
Outlook for financial 2014/2015 as a whole
Economic conditions remain challenging, especially in Europe, and Key Systems does not expect to see a repeat of the boom in demand from the automotive industry. However, in view of the excellent sales growth so far, Kaba is raising its guidance from 3% to 5% and now expects to see organic growth of at least 5% for the 2014/2015 financial year as a whole. It is keeping to its target of matching the previous year's EBTIDA margin of 15.5%.
*Kaba has used the Swiss GAAP FER accounting standard since 1 July 2014. The figures from the annual financial statements and for previous half-year results have been adjusted to allow comparison. As a result of the change, goodwill and other intangible assets from acquisitions are charged directly against shareholders’ equity. This reduces the figures for total assets and the equity ratio as at 30.6.2014 and 31.12.2013.
04/03/2015 - Half-year results: Kaba increases sales and profits
Kaba has strong organic growth at Group level in the first half year.
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16/02/15 - Kaba licences patents for Mobile Access for hotels and other accommodation providers
Kaba Group and ICEPAT AG signed a worldwide licensing agreement.
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02/02/15 - Kaba installs mobile access technology at The Cromwell in Las Vegas
Kaba has installed a mobile access system at The Cromwell in Las Vegas.
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24/11/14 - Important move towards settling 2010 class action litigation in the USA
A proposed settlement has been reached between the representatives of the plaintiffs and Kaba with regards to the 2010 class action litigation in the USA. The court has granted the preliminary motion and a final hearing is scheduled before the end of FY 2014/2015.
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13/11/14 - Capital Market Day: Kaba pushes innovation for sustainable, profitable growth
At today’s Capital Market Day, Kaba Group will be providing in-depth information about its investments in innovation and markets. The event will center on market developments and product innovation in the Access + Data Systems (ADS) business in general, and the ADS Americas Division in particular.
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7/11/14 - Kaba strengthens position in transponder key market
Kaba Group has acquired Advanced Diagnostics Ltd. of Nuneaton (UK) and its related company Advanced Diagnostics USA Inc., based in Las Vegas (USA). The companies specialize in developing programming equipment for the automotive industry.
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3/11/14 - Kaba strengthens access control product portfolio in North America
With the acquisition of Canadian company Keyscan Inc., a recognized specialist in networked access control solutions, Kaba strengthens its product offering in North America. Besides stand-alone and wireless access control systems Kaba now also offers networked solutions.
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28/10/14 - Annual General Meeting approves all Board proposals
Shareholders have approved all proposals at the Annual General Meeting of Kaba Holding AG. Therewith, all statutory amendments necessary as a result of the adoption of the Minder Initiative have already been implemented this year by Kaba Holding AG.
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12/9/14 - Annual results to 30 June 2014: Kaba reaches 1 billion Swiss francs of sales
Kaba Group has posted pleasing results for the 2013/2014 financial year. The company reached the major milestone of one billion Swiss francs of sales: consolidated sales rose 4.1% to CHF 1,003.5 million (prior year: CHF 964.3 million). In local currency, sales even went up by 5.2%. This outcome easily exceeded Kaba’s target of 1.5% to 2.5% organic growth.
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31/7/14 - Acquisition of majority stake in Dorsët Kaba completed
The acquisition of further 25% of shares in Dorsët Kaba is completed
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02/07/14 - New division: Kaba focuses and strengthens business in Asia
Kaba is adjusting its group structure. The existing Access + Data Systems (ADS) EMEA/AP division is being split into an ADS EMEA division and an ADS AP division.
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11/6/14 - Kaba increases its investment in India
Kaba acquires another 25% of the shares of the Dorsët Kaba joint venture and gets majority stake (from 49% to 74%). Dorsët Kaba employs around 1,000 people and achieves annual sales of CHF 22 million. The parties have agreed not to disclose the purchase price.
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