Kaba Group: Solid result despite strong Swiss franc
Growth in local currency terms including acquisitions: + 10.4%
In the first half of the 2011/2012 financial year the Kaba Group generated sales of CHF 464.8 million, which is practically up at the same level as the prior-year figure of CHF 465.8 million. Two of its Business Segments, Access + Data Systems EMEA/Asia Pacific and Americas, achieved pleasing organic growth and impressive margins. The Industrial Locks Business Segment also posted good organic growth, and generated high operating margins. However, these margins were lower than in the prior-year period owing to higher materials costs at the Chinese subsidiary. Meanwhile, because of its early-cycle character, results at the Key Systems Business Segment were already starting to reflect the first signs of the gathering economic downturn.
The strength of the Swiss franc had a negative effect on both sales and earnings. Currency-adjusted, i.e. in local currency terms, sales were up by 10.4% including acquisitions or by 4.6% organically.
Operating margins at prior-year level
Kaba Group's EBITDA margin reached 16.5%, which is practically the same as the year-back figure of 16.9% (adjusted for the sale of the Door Automation Business Segment). EBITDA came to CHF 76.7 million (prior-year period CHF 78.8 million). EBIT during the half-year under review stood at CHF 64.6 million (prior-year period: CHF 63.1 million), giving an EBIT margin of 13.9% (prior-year period: 13.5%). Kaba Group achieved a net profit of CHF 43.8 million (prior-year period: CHF 44.9 million).
Performance by business segment
- Access + Data Systems EMEA/Asia Pacific
The Access + Data Systems EMEA/Asia Pacific Business Segment increased sales by 9.2% to CHF 246.8 million in the half year under review (prior-year period: CHF 226.0 million). Acquisition- and currency-adjusted, sales rose by 6.7% (CHF 14.1 million, converted). The acquisitions contributed 9.9% to sales in local currency (CHF 20.9 million, converted). However, currency influences reduced the headline sales figure by - 6.3% or CHF - 14.2 million. EBITDA of CHF 43.0 million gave a margin of 17.4% (prior-year period: 16.2%).
EBIT came to CHF 36.3 million, with a margin of 14.7% (prior-year period: 13.7%).
- Access + Data Systems Americas
The Access + Data Systems Americas Business Segment generated sales of CHF 61.8 million in the first half-year of 2011/2012 (prior-year period: CHF 63.9 million). Organic growth - i.e. after adjusting for exchange rates and acquisitions - came to 6.5% (CHF 3.6 million, converted). The acquisitions contributed 4.9% to sales in local currency (CHF 2.7 million, converted). However, negative currency influences reduced sales by 13.1% (CHF 8.4 million, converted). EBITDA reached CHF 13.4 million, with a margin of 21.7% (prior-year period: 21.8%). EBIT stood at CHF 12.0 million (prior-year period: CHF 12.3 million), giving an EBIT margin of 19.4% (prior-year period: 19.2%).
Half-year sales at Industrial Locks came to CHF 80.3 million (prior-year period: CHF 87.9 million). Organically, i.e. in local currency terms, the Business Segment increased sales by 4.7% (CHF 3.6 million, converted), but the currency influence trimmed CHF 11.2 million, or 12.7% from the result. EBITDA reached CHF 20.3 million, with a margin of 25.3% (prior-year period: 29.2%). EBIT fell from CHF 22.2 million in the prior-year period to CHF 17.2 million, producing an EBIT margin of 21.4% (prior-year period: 25.3%). The main reason for the lower margins was the higher cost of materials at the Chinese subsidiary.
The early-cyclical Key Systems Business Segment is feeling the effects of the economic downturn, especially in America and certain European countries. Half-year sales reached CHF 84.7 million (prioryear period: CHF 98 million). Currency-adjusted, there was a 2.7% organic decline in sales (CHF 2.3 million, converted). Acquisitions contributed 1.0% to sales in local currency (CHF 0.9 million, converted); but negative currency influences came to - 12.1% (CHF - 11.9 million, converted). The EBITDA of CHF 9.0 million gave a margin of 10.6% (prior-year period: 13.9%). EBIT fell from CHF 9.9 million in the prior-year period to CHF 6.5 million, leaving a margin of 7.7% (prior-year period: 10.1%).
Impressive balance sheet
Kaba Group's balance sheet as at 31 December 2011 was very solid, leaving the company well equipped for future challenges. Net debt fell from CHF 241.4 million on 31 December 2010 to CHF 68.7 million on 31 December 2011 (net debt on 30 June 2011: CHF 32.8 million). As at the balance sheet date of 31 December 2011, the equity ratio stood at 53.8% (30 June 2011: 52.8%; 31 December 2010: 34.9%).
Full-year expectations confirmed
Kaba expects sales growth in local currency terms of around 5% for the full 2011/2012 financial year, including the acquisitions made in 2010/2011, and an EBITDA margin of 15% to 16%. Continued organic growth and solid margins are expected in the second half of the year for the two Access + Data Systems Business Segments as well as the Industrial Locks Business Segment. In the Key Systems Business Segment, cost-reduction measures have been initiated with the aim of strengthening margins.