Kaba Holding AG

euro adhoc: Kaba Holding AG
Annual Reports
Kaba posts gains in operating profitability (E)

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Rümlang, September 22, 2003  -  At its press conference in Zürich today, the management of the Kaba Group discussed the financial re-sults for 2002/03. With the exception of the Door Systems Division, the Group’s business units in part reported remarkable local-currency growth rates and considerable progress as regards operating profitability. Although no significant rebound of the market is ex-pected in the course of Kaba’s current financial year, the Group is poised to benefit overproportionally from the long-term upswing in demand for security-related products and services. The Board of Di-rectors is proposing to the forthcoming General Meeting the creation of authorized share capital representing a maximum amount of CHF 3.5 million to facilitate and leverage potential acquisition negotia-tions.

As already outlined in the press release issued on September 10, 2004, sales generated by the Kaba Group in financial 2002/03 as at June 30, 2003, declined by 5.8% to CHF 967.2 million. Largely due to currency translation losses, EBIT decreased by 11.6% to CHF 108.7 million. Chiefly because of a massive 26.1% increase of the tax rate, consolidated net income closed lower at CHF 45.7 million, fal-ling perceptibly short of the prior-year result. Spending restraint and the strength of the Swiss franc were the key reasons for the negative trend in sales.

Divisions largely recession-resistant Based on the previous year’s exchange rates in a comparable scope of consolidation, sales rose by 0.7% from CHF 1,020.3 million to CHF 1,027.0 million. All divisions except Door Systems were able to in-crease or stabilize sales. Not including Door Systems and expressed in local currencies, comparable sales picked up by 1.8% and EBIT rose by 7.1% to CHF 120.8 million. The EBIT margin gained 0.4% to close at 14.7%.

The Data Collection Division - identical with Kaba Benzing - in-creased its acquisition- and currency-adjusted sales by 3.1%. The EBIT margin rose from 11.2% to 11.7%. Although sales in Germany stagnated, the division was able to post growth through the interna-tional distribution companies in Europe and the USA.

The three Access Divisions (Access Europe, Access Asia Pacific, and Access and Key Systems Americas) posted 2.0% local-currency growth. The EBIT margin improved from 13.8% to 14.7%. Absolute EBIT closed at CHF 85.9 million, virtually unchanged from the prior year. In currency-adjusted terms, the Access and Key Systems Americas Divi-sion, mainly composed of the operations acquired from Unican in 2001, reported sales gains of 2.8% and an increase of EBIT by 16.4% to CHF 69.9 million. Thus, this division contributes 31% to consoli-dated sales and 55% to the Kaba Group’s EBIT.

The Key Systems (Europe) Division reported a slight uptrend in lo-cal-currency sales. The EBIT margin decreased from 19.8% to 17.0% and thus remains at a high level.

Outlook Economic uncertainties and depleted budgets continue to paralyze in-vestment activity in the markets served by Kaba.  At present, we see no signs that suggest an imminent improvement of the situation and therefore expect financial 2003/2004 to follow the patterns of the year under review. In some markets, it will be possible to achieve progress in terms of sales and profitability, but consolidation in Swiss francs could once again prove to be a hindrance.On the positive side, the one-time restructuring charges in the year under review of CHF 8 million will not be incurred in the new financial year.

Motion to the General Meeting regarding the creation of authorized capital With the intention of boosting Kaba’s credibility and negotiation leverage in possible acquisition discussions and to facilitate ac-cess to suitable candidate companies, the Board of Directors of Kaba Holding AG plans to create authorized capital. It will ask the Gen-eral Meeting on October 21, 2003, to approve the preemptive creation of authorized capital representing a maximum amount of CHF 3.5 mil-lion. If ratified, this would allow the Board of Directors by no later than October 21, 2005, to increase the share capital by issu-ing no more than 350,000 new shares with a par value of CHF 10 each. According to CEO Ulrich Graf, an acquisition would only be consum-mated if the candidate company had the ability to accelerate the «Total Access» strategy, strengthen the Kaba Group’s earnings potential, and have a positive impact on the trend in earnings per share.

Ready for above-average growth For the current financial year which ends on June 30, 2004, Kaba does not yet expect a better operating result than in the year under review. In the longer term, however, the security market will grow clearly faster than GNP when the economy picks up steam again. This applies in particular to higher-end products and integrated solu-tions such as those marketed by Kaba. Experience confirms that in-ternal growth allows Kaba to achieve overproportional EBIT margin growth. In a positive economic environment, buoyed by the integra-tion of possible future acquisitions, Kaba reaffirms the feasibility of its long-term goal of double-digit average earnings-per-share growth on an annualized basis.

Kaba is a globally active, publicly traded security corporation. With its «Total Access» strategy, the Kaba Group is specialized in integrated solu-tions for security, organization, and convenience at building and informa-tion access points. Kaba is also the world market’s No. 1 provider of key blanks, key cutting and coding machines, transponder keys, and high secu-rity locks. It is a leading provider of electronic access systems, locks, master key systems, hotel locking systems, security doors, and automatic doors. Further information is available at www.kaba.com

This communication contains certain forward-looking statements including statements using the words "believes", "assumes", "expects" or formulations of a similar kind. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which could lead to substantial differences be-tween the actual future results, the financial situation, the development or performance of the Company and those either expressed or implied by such statements. Such factors include, among other things: competition from other companies, the effects and risks of new technologies, the Company's continuing capital require-ments, financing costs, delays in the integration of acquisitions, changes in the operating expenses, the Company's ability to recruit and retain qualified employees, unfavorable changes to the applicable tax laws, and other factors identified in this communication. In view of these uncertainties, readers are cau-tioned not to place undue reliance on such forward-looking statements. The Company accepts no obligation to continue to report or update such forward-looking statements or adjust them to future events or develop-ments.

end of announcement            euro adhoc 22.09.2003
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Further inquiry note: Ulrich Graf, CEO; Tel. +41 1 818 90 61, Fax +41 1 818 90 52 Dr. Werner Stadelmann, CFO; Tel. +41 1 818 90 61, Fax +41 1 818 90 52

Branche: Semiconductors & active components
ISIN:      CH0011795959
WKN:        1179595
Index:    SPI
Börsen:  SWX Swiss Exchange / official dealing



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