Dormakaba to pass on tariff costs to customers as it targets North American growth
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
Dormakaba expects its North American revenue to keep growing over the next three years, as the Swiss security and access systems provider passes on charges from U.S. import duties to customers while cost cuts help it cushion the impact of softer demand.
The company aims to increase revenue from its key access solutions business in North America to more than 1 billion Swiss francs ($1.25 billion) by the 2027/28 financial year, CEO Till Reuter said during a press call. That would mark an at least 39 per cent rise from the 722 million francs in the year that ended on June 30.
Dormakaba, whose entrance systems can be found in venues such as offices, airports and sports stadiums, intends to pass on the costs from U.S. President Donald Trump's tariffs through higher pricing, which it said was in line with industry practices.
Swedish rival Assa Abloy has also said it would offset tariff-related costs chiefly through price increases.
Many of Dormakaba's products sold in the United States, its largest market, are manufactured locally. Reuter said that 80 per cent to 90 per cent of the company's U.S. sourcing was done in the country, which meant the impact from tariffs was limited.
Tariff-related shifts in the U.S. market could also lead to increased construction activity, indirectly boosting demand for Dormakaba's products, especially in the commercial manufacturing segment, finance chief Rene Peter added.
The company forecast annual organic sales growth of 3 per cent to 5 per cent for the current fiscal year, compared with 4.1 per cent growth in 2024/25. It expects its adjusted core profit (EBITDA) margin to exceed 16 per cent, up from the 15.5 per cent it reported for the past year.
Sales growth last year was slightly below analysts' consensus, while the profit margin and outlook were broadly in line.
Adjusted net profit of 188 million francs meanwhile beat analysts' average estimate of 176 million francs provided by the company.
($1 = 0.8019 Swiss francs)
