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Dormakaba CEO – «Absolute security does not exist» News

Tuesday, September 12th, 2017 | Economy

More sales, more profits, more dividend: The business figures of Dormakaba convince practically on the whole line. Also on the stock market the payment set for the financial year 2016/17 (at the end of June) is very good. In the course of the day, the Dormakaba share rises above 1000 francs for the first time in the company's history. At 12 noon it recorded 12 per cent plus 1015 francs.
Sales also grew by 9.4 percent to 2.52 billion Swiss francs, driven by acquisitions. Organic growth was 4.3 percent. Even more important for the share price: with the figures, Dormakaba exceeded the expectations of the financial market.
In the future, organic growth, ie growth on its own and not through acquisitions, will continue to lie in this area. "We are striving for 1.5 to 2 percent over the relevant gross domestic product," says Riet Cadonau in the cash video interview. This would correspond to organic growth between 4 and 4.5 percent, as the Dormakaba CEO continues.
No job cuts in Switzerland
Dormakaba was developed in 2015 from the Swiss Kaba Group and the German family business Dorma. As a result, the Group became the world's third largest locking technology company.
The integration is to be largely completed by one year. As a result of the merger, Dormakaba has already canceled a few hundred posts, including 440 in Germany. Are other jobs lost? "We have already reduced 70 per cent of the announced 800 positions, and no job cuts are planned in Switzerland," says Cadonau.
Hackers are a challenge
An important growth driver for Dormakaba is the growing need for security. Terrorist attacks and cybercrime make people, companies and states invest more money in security solutions. Dormakaba serves this market with complex access and door systems. But the problems become increasingly complex, as Riet Cadonau says: "The chopping of locks is a challenge for mechanical as well as for electronic and Internet-based access systems."
In hotels, for example, more access systems are used, which function by mobile phone. To make this as secure as possible, Dormakaba relies on its own cloud, ie an IT infrastructure on the Internet. Although these correspond to the highest security standards, to prevent hacking, according to Cadonau. "But there is no absolute certainty."
The dividend increase from 12 to 14 Swiss francs per share is particularly pleasing. This results in a return on the current share price of 1.4 percent – compared to other industrial companies and also generally considered as a low value. Is there air still up? "Our dividend policy says that at least 50 percent of the profits are distributed to minorities, the higher the earnings, the higher the dividend," says Cadonau.

The downside of the stock market is the now very high valuation of Dormakaba. With a price-earnings ratio of around 30, the share price already reflects a large part of future investor hopes. The Neue Helvetische Bank writes in a recent commentary that it would not build up a position at levels above 1000 francs, but "only in the case of intermittent disappointments".
In a video interview with cash, Riet Cadonau also talks about the situation in the Swiss market and the impressive performance of the Dormakaba share.


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