ZURICH, July 19 (Reuters) - Shares in Swiss-German entry systems maker Dormakaba plunged on Thursday after it pushed back its profitability targets following full-year 2017/18 results that missed expectations amid problems in Germany and the United States.
The company now expects to hit its medium-term financial target — including operating profit as a percentage of sales of 18 percent — at the latest in the 2020/21 financial year, delayed from the previous goal of 2018/19.
Its margin for earnings before interest, taxes, depreciation and amortisation fell to around 15 percent last year, from 15.4 percent in the previous period. For the current year, the company is expecting a margin of only 16-16.5 percent, well short of its midterm goal.
The shares were down 15 percent at 0720 GMT in Zurich.
Dormakaba is struggling to integrate businesses in Germany and the United States, where it says managers were “more absorbed” by the challenge than had been expected. U.S. demand for automatic teller machine (ATM) locks and a service business in decline also weighed on results.
“In light of the results for the 2017/18 financial year, which are below expectations, and due to the delay of the integration particularly in Germany and the U.S., Dormakaba is adjusting the timeline for achieving its medium-term financial targets,” the company said in a statement.
In the 2017/18 financial year, Dormakaba boosted consolidated sales by around 13 percent to about 2.84 billion Swiss francs ($2.84 billion), it said.
The complete, final and audited financial results for the 2017/18 financial year will be announced on Sept. 11. ($1 = 1.0009 Swiss francs) (Reporting by John Miller; Editing by Jan Harvey)