Dormakaba beats annual sales forecast, aided by price hikes

© Reuters. FILE PHOTO: The logo of the Swiss Dormakaba security group is seen at its headquarters in Ruemlang, Switzerland, July 22, 2021. REUTERS/Arnd Wiegmann/File Photo

By Tristan Veyet and Paolo Laudani

(Reuters) - Dormakaba beat full-year sales and margin forecasts on Thursday, as price increases helped the Swiss security device maker improve its performance in the second half of the fiscal year.

The company, whose products range from entrance systems to safe locks, reported net sales of 2.85 billion Swiss francs ($3.24 billion) for the year through June, up 8.4% organically and ahead of analysts' forecast of 2.82 billion in a company-provided poll.

The shares were up 3.61% in early trading.

The results mirror wider market trends, after Swedish lock maker Assa Abloy and Dublin-based electric security device maker Allegion also reported higher quarterly revenues on solid demand.

Sales were helped by the easing of global supply chain disruptions that allowed locking device makers to get raw materials and key electronic components such as chips on time.

"It is not an entirely return to normal situation," Dormakaba Chief Executive Jim-Heng Lee said about the improved chip supplies in an interview with Reuters.

Regionally, the Americas division saw strongest organic sales growth at 10.5%, while Asia-Pacific was the weakest with 2.2% growth, reflecting a sluggish China recovery.

"Clearly recovery so far (in China) has been below expectations. We have to take internal measures in order to focus on growth opportunities within our Chinese market," Lee said.

For the 2023/24 financial year, Dormakaba expects its profitability to improve from the prior year, helped by pricing and cost management. Organic sales growth should come in line with the mid-term target of 3-5%, it said.

The annual margin on adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was in line with last year at 13.5%, beating the 13.2% expected by analysts.

The company said it would pay a dividend of 9.50 Swiss francs per share for the year, below the 11.50 francs per share it paid for fiscal 2021/22.

($1 = 0.8783 Swiss francs)