Dormakaba Holding Ag · SIX:DOKA
Dormakaba — Kaba Holding — Merger or Acquisition (April 2015)
55 slides from Dormakaba's merger presentation, Apr 30, 2015
Slide 1: Merger of Dorma and Kaba
Merger of Dorma and Kaba Presentation for Investors, Analysts and Media Zurich, 30 April 2015 1
Slide 2: Disclaimer
Disclaimer Pro-forma information in this press release serves as an illustration delays in the integration of the combination or acquisitions, and contains simplified assumptions. Rounding effects may occur. The changes in the operating expenses, representation of this financial information is b
Slide 3: Agenda
Agenda Introduction, transaction summary Ulrich Graf, Chairman Kaba Dorma and Kaba: a strong fit Dr. Hans Gummert, Chairman Dorma A unique value proposition Riet Cadonau, CEO Kaba Value creation, transaction structure Bernd Brinker, CFO Dorma Governance and next steps Ulrich Graf, Chairman
Slide 4: Seizing a unique opportunity
Seizing a unique opportunity The merger of Dorma and Kaba is a unique opportunity to significantly strengthen the market position of the merged company and to achieve an even more successful long-term development of the combined group. Merger to dorma+kaba © Dorma and Kaba 2015 30.4.2015 4
Slide 5: Transaction summary (1)
Transaction summary (1) Company dorma+kaba name Company dorma+kaba Holding AG, Rümlang, listed on SIX Swiss Exchange domicile New global top 3 player with pro-forma sales exceeding CHF 2 billion Leading integrated security and access solutions provider, strengthened Value market presence pro
Slide 6: Transaction summary (2)
Transaction summary (2) Family Mankel/Brecht-Bergen, owner of Dorma, to acquire 9.1% in Kaba Holding Dorma and Kaba businesses to be combined at Dorma parent level Transaction (Ennepetal, Germany) structure Kaba Holding to become dorma+kaba Holding, to control 52.5% (Mankel/ Brecht-Bergen fami
Slide 7: Agenda
Agenda Introduction, transaction summary Ulrich Graf, Chairman Kaba Dorma and Kaba: a strong fit Dr. Hans Gummert, Chairman Dorma A unique value proposition Riet Cadonau, CEO Kaba Value creation, transaction structure Bernd Brinker, CFO Dorma Governance and next steps Ulrich Graf, Chairman
Slide 8: Dorma and Kaba – coherent vision, values and strategies
Dorma and Kaba – coherent vision, values and strategies We are the trusted global partner for We deliver innovative access solutions and premium access solutions and services premium services to protect people and enabling better buildings property. We serve our customers with passion in exceeding t
Slide 9: Dorma and Kaba at a glance
Dorma and Kaba at a glance Dorma Kaba Provider of premium access solutions and Leader in access control, enterprise data services, leader in door closing systems, collection and key systems automatic door systems and glass fittings Headquarters in Ennepetal (Germany) Headquarters in Rümlang
Slide 10: Strong financial profile of the combined group
Strong financial profile of the combined group Dorma Kaba Pro-forma combined FY 2013/2014 as of 30 June 2014 in EUR million in CHF million in CHF million Sales 1,010.3 1,003.5 2,241.7 Gross profit 436.2 446.8 981.4 in % 43.2 44.5 43.8 EBITDA 120.2 155.3 302.6 in % 11.9 15.5 13.5 EBIT 89.3 123.6 233.
Slide 11: Business profile of the combined group
Business profile of the combined group Sales in CHF million FY 2013/2014 (CHF/EUR 1.2256) Dorma Kaba 700 600 169 500 400 321 300 216 467 98 200 100 267 199 190 187 115 0 Access Solutions Access Solutions Access Solutions Access Solutions Key Systems Moveable Walls EMEA DACH AM APAC 28.4% of 26.2% of
Slide 12: Attractive growth drivers
Attractive growth drivers Urbanization Growing need for security Digitalization and globalization (technological innovation) Increasing prosperity in emerging markets Merger to dorma+kaba © Dorma and Kaba 2015 30.4.2015 12
Slide 13: Agenda
Agenda Introduction, transaction summary Ulrich Graf, Chairman Kaba Dorma and Kaba: a strong fit Dr. Hans Gummert, Chairman Dorma A unique value proposition Riet Cadonau, CEO Kaba Value creation, transaction structure Bernd Brinker, CFO Kaba Governance and next steps Ulrich Graf, Chairman
Slide 14: A unique value proposition
A unique value proposition 1. Top 3 market position dorma+kaba transformational transaction will drive industry consolidation Top 3 market Excellent 2. Excellent strategic fit position strategic fit Complementary product portfolios, enhanced access to key markets, strong combined presence throughout
Slide 15: Top 3 position in highly fragmented industry
Top 3 position in highly fragmented industry Revenues in CHF million* 7000 Fragmented industry: top 5 industry 6000 player jointly only have a 25% share 5000 in total market 4000 Industry poised for consolidation 3000 and new entry through acquisitions 2000 Competition in sector intensifying 1
Slide 16: Key segments: complementary portfolios
Key segments: complementary portfolios Dorma Kaba dorma+kaba Cylinders + Locks (mechanical, mechatronic) Digital/Electronic Locks Electronic Access Control Door Closers Architectural Hardware Safe Locks Lodging Products Escape + Rescue Entrance Systems (automatic doors) Physical Access Systems Workf
Slide 17: One-stop-shop for building access solutions
One-stop-shop for building access solutions Electronic Access Control Cylinders + Locks Door Closers Each building has different requirements regarding the Architectural Hardware perfect access solution. Service + Installation dorma+kaba will be able to offer products and services suited to serv
Slide 18: Enhanced access to markets worldwide
Enhanced access to markets worldwide Strengthened presence and increased market power in Europe, Americas and Asia Pacific will accelerate global expansion. Production facilities in all of the industry’s core markets will ensure proximity to customers and support natural FX hedge. Group Countrie
Slide 19: Strong combined presence throughout building construction value chain
Strong combined presence throughout building construction value chain Dorma Early in building cycle Strong in new construction business and service Kaba Late in building cycle Strong in replacement, upgrading and project business Combination of portfolios, sales channels and expertise facilitate
Slide 20: Innovation leadership – best in class R+D
Innovation leadership – best in class R+D Innovation portfolio driven by − Market trends and customer requirements − Technological trends − Corporate strategy Design as part of innovation Approx. 400 employees in R+D R+D investment pro-forma combined for 2013/2014: approx. CHF 85 million S
Slide 21: Value enhancement
Value enhancement Expected run-rate cost synergies of CHF 60-70 million, in addition to revenue synergies dorma+kaba combined guidance, including synergies (provided stable economies) − Approx. 6-7% run-rate sales growth expected (in local currencies) − EBITDA margin of 18% to be reached within
Slide 22: A sustainable future
A sustainable future The best of two worlds Together, we strengthen our market position through complementary portfolios, value chains and geographical footprints and unlock a host of new growth opportunities Meeting market needs and trends With a comprehensive offering from a single source and
Slide 23: Agenda
Agenda Introduction, transaction summary Ulrich Graf, Chairman Kaba Dorma and Kaba: a strong fit Dr. Hans Gummert, Chairman Dorma A unique value proposition Riet Cadonau, CEO Kaba Value creation, transaction Bernd Brinker, CFO Dorma structure Governance and next steps Ulrich Graf, Chairman
Slide 24: Expected synergies
Expected synergies Expected revenue synergies resulting from strengthened market presence (shared distribution and service network, cross selling, one-stop-shop building access solutions) Expected run-rate cost synergies of CHF 60-70 million, resulting from higher purchasing volumes, optimized i
Slide 25: Value creation for shareholders: financial targets
Value creation for shareholders: financial targets dorma+kaba combined guidance, including synergies (provided stable economies) − Approx. 6-7% run-rate sales growth expected (in local currencies) − EBITDA margin of 18% to be reached within four years Transaction expected to be double-digit perc
Slide 26: Transaction structure
Transaction structure Dorma owners Kaba family Kaba public 1. Kaba shareholders to approve (Family Mankel/ shareholders shareholders transaction at Extraordinary General Brecht-Bergen) 21% 18.2% 79% 72.7% Meeting on 22 May 2015 2. Subsequently: Family Mankel/ 0% 9.1% Brecht-Bergen to subscribe
Slide 27: Valuation considerations
Valuation considerations Dorma and Kaba warrant the same valuation multiples, Fundamental valuation approach given similar nature of businesses Provisions of transaction agreement Agreed valuation multiples Dorma 10.1x EV/EBITDA LTM Kaba 12.2x EV/EBITDA LTM (as per locked box date 30.06.2014) Relati
Slide 28: Agenda
Agenda Introduction, transaction summary Ulrich Graf, Chairman Kaba Dorma and Kaba: a strong fit Dr. Hans Gummert, Chairman Dorma A unique value proposition Riet Cadonau, CEO Kaba Value creation, transaction structure Bernd Brinker, CFO Dorma Governance and next steps Ulrich Graf, Chairman
Slide 29: Planned organizational setup of dorma+kaba
Planned organizational setup of dorma+kaba Board of Directors Chief Executive Officer Chief Chief Financial Integration Officer Officer COO COO COO COO COO COO Access Solutions Access Solutions Access Solutions Access Solutions Key Systems Moveable Walls AM APAC DACH EMEA Chief Manufacturing Officer
Slide 30: Overview of governance
Overview of governance Chairman-designate: Ulrich Graf, currently Chairman of the Board of Kaba Group Board of Directors Three new members proposed, Thomas Pleines has agreed to step down Balanced distribution of management functions envisaged Executive CEO-designate: Riet Cadonau, currently
Slide 31: Proposed changes to the Board of Directors
Proposed changes to the Board of Directors Ulrich Graf Dr. Rolf Dörig Christine Mankel Elton SK Chiu Dr. Daniel Daeniker Stephanie Brecht-Bergen Karina Dubs-Kuenzle John Heppner Hans Hess Dr. Hans Gummert Merger to dorma+kaba © Dorma and Kaba 2015 30.4.2015 31
Slide 32: Kaba Extraordinary General Meeting
Kaba Extraordinary General Meeting Agenda items: − Approval of business combination − Confirmation of exemption to submit a mandatory offer (formally selective opting-out limited to the context of the planned transaction) − Change of company name into dorma+kaba Holding AG − Further amendments to
Slide 33: Next steps
Next steps EGM Kaba shareholders: EGM scheduled for 22 May 2015 Subsequent issue of 380,000 Kaba shares from authorized capital Capital increase and subscription by family Mankel/Brecht-Bergen Expected in fall 2015, pending approval of competition authorities Closing in particular New group
Slide 34: A transaction to benefit all stakeholders
A transaction to benefit all stakeholders Customers Employees Shareholders Most comprehensive Shared values Strong financial profile product offering, Opportunity to work for and superior growth one-stop-shop a new market leader expectations Broad global reach Attractive international
Slide 35: Q&A
Q&A 35
Slide 36: Financial appendix
Financial appendix Merger of dorma + Kaba © Dorma and Kaba 2015 30.04.2015 1
Slide 37: Kaba: consolidated income statement
Kaba: consolidated income statement FY ended FY ended 30.06.2014 30.06.2013 in CHF million (restated) Net sales 1,003.5 964.3 % growth 4.1 1.8 Cost of goods sold -556.7 -538.9 Gross margin 446.8 425.4 % margin 44.5 44.1 Other income 8.3 11.5 Sales + marketing -178.0 -170.2 General administration -10
Slide 38: Kaba: consolidated balance sheet – assets
Kaba: consolidated balance sheet – assets FY ended FY ended 30.06.2014 30.06.2013 in CHF million (restated) Property, plant, equipment 156.8 158.6 Intangible assets 314.5 280.7 Investments in equity-accounted companies 3.2 3.0 Other non-current financial assets 17.7 16.8 Deferred tax assets 9.2 9.3
Slide 39: Kaba: consolidated balance sheet – liabilities
Kaba: consolidated balance sheet – liabilities FY ended FY ended 30.06.2014 30.06.2013 in CHF million (restated) Provisions for pensions and other employee benefits 57.6 49.6 Other provisions 0 0 Long-term debt 5.1 3.8 Other non-current liabilities 0.3 0.3 Deferred tax liabilities 29.0 29.9 Total no
Slide 40: Kaba: shareholders’ equity
Kaba: shareholders’ equity FY ended FY ended 30.06.2014 30.06.2013 in CHF million (restated) Paid-in capital 0.4 0.4 Additional paid-in capital 631.0 631.0 Other reserves -116.5 -90.2 Retained earnings 79.0 41.7 Shareholders’ equity 593.9 582.9 Non-controlling interests 1.0 0.9 Total equity 594.9 58
Slide 41: Kaba: cash flow statement – operating activities (1)
Kaba: cash flow statement – operating activities (1) FY ended FY ended 30.06.2014 30.06.2013 in CHF million (restated) Cash flow from operating activities Net income 84.6 85.3 Depreciation and amortization 31.7 31.4 Impairment of intangible assets incl. goodwill + financial 0 0 investments Tax expen
Slide 42: Kaba: cash flow statement – operating activities (2)
Kaba: cash flow statement – operating activities (2) FY ended FY ended 30.06.2014 30.06.2013 in CHF million (restated) Cash flow from operating activities Other non-cash income/expense 2.4 -0.2 Gain recognized on disposal of discontinued operations N/A -1.5 Changes in: inventories -10.5 4.2 trade +
Slide 43: Kaba: cash flow statement – invest. + financ. activities
Kaba: cash flow statement – invest. + financ. activities FY ended FY ended 30.06.2014 30.06.2013 in CHF million (restated) Cash flow from investing activities Proceeds from sales of property, plant, equipment+ intangible 0 3.0 assets Acquisition of businesses (net of cash acquired) -35.9 -0.9 Purcha
Slide 44: Kaba: cash flow statement – final
Kaba: cash flow statement – final FY ended FY ended 30.06.2014 30.06.2013 in CHF million (restated) Translation changes on cash and equivalents -4.4 -0.3 Net change in cash and equivalents -61.8 16.7 Cash and equivalents, beginning of period 142.3 125.6 Cash and equivalents, end of period 80.5 142.3
Slide 45: Dorma: consolidated income statement
Dorma: consolidated income statement FY ended FY ended 30.06.2014 30.06.2013 in EUR million (restated) Net sales 1,010.3 1,005.8 % growth 0.4 0.4 Cost of sales -574.1 -579.0 Gross margin 436.2 426.8 % margin 43.2 42.4 Other income 25.3 36.9 Sales, marketing and distribution -207.2 -211.0 General adm
Slide 46: Dorma: consolidated balance sheet – assets
Dorma: consolidated balance sheet – assets FY ended FY ended 30.06.2014 30.06.2013 in EUR million (restated) Property, plant and equipment 128.8 140.0 Intangible assets 86.2 58.1 Investments in equity-accounted companies 36.6 39.1 Long-term investments 18.8 0.5 Trade and other receivables 1.4 1.5 Ot
Slide 47: Dorma: consolidated balance sheet – liabilities
Dorma: consolidated balance sheet – liabilites FY ended FY ended 30.06.2014 30.06.2013 in EUR million (restated) Provisions for pensions and other employee benefits 184.8 163.6 Other provisions 3.9 3.8 Trade payables 1.2 2.3 Long-term debt 2.8 3.6 Other non-current liabilities 1.7 4.0 Income tax pay
Slide 48: Dorma: shareholders’ equity
Dorma: shareholders’ equity FY ended FY ended 30.06.2014 30.06.2013 in EUR million (restated) Issued capital 13.1 13.1 Additional paid-in capital 239.4 239.4 Other reserves -21.1 -10.8 Retained earnings 203.5 137.2 Shareholders’ equity 434.9 378.9 Total equity 434.9 378.9 Total liabilities and share
Slide 49: Dorma: cash flow statement – operating activities (1)
Dorma: cash flow statement – operating activities (1) FY ended FY ended 30.06.2014 30.06.2013 in EUR million (restated) Cash flow from operating activities Net income 71.6 51.0 Depreciation and amortization 29.1 29.3 Impairment of intangible assets incl. goodwill + financial 1.9 0 investments Share
Slide 50: Dorma: cash flow statement – operating activities (2)
Dorma: cash flow statement – operating activities (2) FY ended FY ended 30.06.2014 30.06.2013 in EUR million (restated) Cash flow from operating activities Other (actuarial gains/losses, revaluation AFS-securities) -5.3 -11.8 Other non-cash income/expense 0.1 -21.9 Changes in: inventories -17.2 17.9
Slide 51: Dorma: cash flow statement – invest. + financ. activities
Dorma: cash flow statement – invest. + financ. activities FY ended FY ended 30.06.2014 30.06.2013 in EUR million (restated) Cash flow from investing activities Proceeds from sale of property, plant, and equipment and 2.1 6.1 intangible assets Acquisition of businesses (net of cash acquired) -40.0 -3
Slide 52: Dorma: cash flow statement – final
Dorma: cash flow statement – final FY ended FY ended 30.06.2014 30.06.2013 in EUR million (restated) Net change in cash and equivalents -89.5 73.2 Cash and equivalents, beginning of period 202.2 132.0 Effects of exchange rate changes on cash and equivalents -2.1 -2.9 Cash and equivalents, end of per
Slide 53: Historical financial performance Dorma versus Kaba (IFRS)
Historical financial performance Dorma versus Kaba (IFRS) (in EURm) Acquisition of Wah Yuet Group in China and CSS >40% of decline due to Divestment of Segment Inc. in the US currency effects and Door Automation in disposal of Canadian 2010/2011 20.0% zinc foundry Capitol 1'002 1'006 1'010 9.6% 894
Slide 54: Business profile of the combined group
Business profile of the combined group Sales in CHF million FY 2013/2014 (CHF/EUR 1.2256) Dorma Kaba 700 600 169 500 400 321 300 216 467 98 200 100 267 199 190 187 115 0 Access Solutions Access Solutions Access Solutions Access Solutions Key Systems Moveable Walls EMEA DACH AM APAC 28.4% of 26.2% of
Slide 55: Employees per division
Employees per division FTE as of 31 December 2014 Dorma Kaba 6000 5000 4000 3891 3000 1641 683 2000 1338 1000 1997 2153 1380 1580 829 594 0 Access Solutions Access Solutions Access Solutions Access Solutions Key Systems Moveable Walls EMEA DACH AM APAC 16.1% of 22.8% of 13.0% of 31.7% of 9.5% of 3.6