Elevators Schindler increases profitability in the first half of the year
As expected, elevator and escalator manufacturer Schindler achieved slightly lower sales in the first half of the year, but earned more on the bottom line. The company has now confirmed its previous outlook, but has refrained from issuing a profit forecast.
19.07.2024, 06:48
19.07.2024, 07:12
SDA
From January to June, Schindler's turnover was 2.3 percent lower at 5.59 billion Swiss francs, as the company announced on Friday. The strong Swiss franc weighed on the result; in local currencies, there was a slight increase of 1.4 percent.
The Group recorded a decline in new investment business. At least in local currencies, this was offset by growth in the modernization and service business. Regionally, China remains the problem child. The weakness there was offset by an increase in sales (in LC) in the EMEA, Americas and Asia-Pacific regions.
Meanwhile, order intake also fell slightly to CHF 5.77 billion (previous year: CHF 5.94 billion), resulting in a slight increase of 1.0 percent in local currencies. According to Schindler, the new installations business also declined in terms of orders - and here, too, primarily in China. In contrast, the modernization and service business continued to grow.
Profitability improved
Despite the decline in sales, Schindler improved its profitability. This was achieved thanks to greater operating efficiency, the pricing policy and a changed business mix, the Group announced.
Adjusted operating profit at EBIT level increased to CHF 637 million (previous year: CHF 606 million). The EBIT margin increased by 80 basis points to 11.4 percent.
On a quarterly basis, Schindler was thus able to increase its profitability for the sixth time in a row. "We have kept our promise to become more profitable", Schindler CEO Silvio Napoli is quoted as saying. In the medium term, Schindler is aiming for a margin of 13.0 percent, according to the analysts' presentation already published.
The bottom line was a profit of 494 million Swiss francs, compared to 463 million Swiss francs in the same period of the previous year. The company thus just met analysts' expectations (AWP consensus) on average.
Previous outlook confirmed
In its outlook, Schindler confirms its sales forecast for the year as a whole. Accordingly, the Group continues to expect sales growth in local currencies in the low single-digit percentage range and an EBIT margin of 11 percent. In line with the communicated goal of increasing organizational efficiency, this includes restructuring costs of CHF 80 million.
What is missing from the press release and presentation, however, is a profit forecast for the full year 2024. In 2023, Schindler achieved a net profit of CHF 935 million.
