Dormakaba reports improved core profit as it continues to cut costs
Adds shares in paragraph 2, CEO quotes paragraphs 4-6, analyst comment paragraph 8, confirmed mid-term guidance paragraph 9
By Tristan Veyet and Chiara Holzhaeuser
Sept 3 (Reuters) -Swiss security technology group Dormakaba DOKA.S reported higher full-year core profit and margin on Tuesday, supported by the cost cutting measures it has implemented over the past year.
Its shares were 5.4% higher at 0725 GMT.
The company, whose products range from entrance systems to safe locks, is trying to improve its profitability to keep up with competitors such as Assa Abloy ASSAb.ST and Allegion ALLE.N. In July 2023, it launched a cost cutting plan that it said would also include staff reductions.
It has since implemented measures such as moving services to countries with lower labour costs, decreasing the number of suppliers and closing sites, CEO Till Reuter told Reuters.
"We also have agreements with the works councils and employer representatives to work on the layoffs of people over the next 18 months," he added.
Dormakaba said last year that the planned cuts could affect up to 1,800 jobs, with an expected net reduction of about 800 full-time equivalent positions. Reuter did not provide an update to these numbers, but said the transformation plan was on track.
Dormakaba reported an 8.3% jump in its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to 416.9 million Swiss francs ($488.9 million) in the year ended June 30. That corresponded to an adjusted EBITDA margin of 14.7%, up from 13.5% in the year prior.
"Dormakaba seems to make progress on closing the gap to its competitors," Baader Helvea analyst Zana Mamelli said about the margin.
The group forecast organic sales growth of 3-5% for the fiscal 2024/25, in line with its confirmed mid-term guidance. It expects an adjusted EBITDA margin of at least 15% in the current year and 16-18% in the medium term.
The Swiss group said it would propose a dividend of 8 francs per share at its annual general meeting, down from the 9.50 francs distributed last year.
($1 = 0.8527 Swiss francs)
Reporting by Tristan Veyet and Chiara Holzhaeuser in Gdansk, editing by Milla Nissi
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