Elevators Schindler reports higher profit after nine months despite lower revenue
The elevator and escalator manufacturer Schindler faced headwinds in the first nine months of the year. Sales and incoming orders shrank. On the other hand, profits rose.
17.10.2024, 06:51
17.10.2024, 07:23
SDA
From January to September, sales fell by 1.8 percent to 8.38 billion Swiss francs, as the Central Swiss company announced in a press release on Thursday. The strong Swiss franc had a negative impact on revenue. Foreign currency effects cost 307 million francs in sales.
Without the foreign currency effects, turnover would have grown by 1.8 percent. Sales of new installations shrank, which Schindler was able to compensate for with sales growth in modernizations and the service business. Sales in local currencies increased in all regions except China, according to the statement.
More profit
Adjusted operating profit (EBIT) climbed by 7.6 percent to 987 million Swiss francs. The operating margin improved to 11.8 percent from 10.7 percent in the previous year. Increased operational efficiency, price increases and a changed product mix contributed to this. The figures do not include certain items such as restructuring costs and expenses for the Building Minds program.
If these are taken into account, EBIT rose by 5.9 percent to CHF 945 million. At the bottom line, net profit improved by 8.2 percent to 748 million Swiss francs.
With these figures, Schindler fell slightly short of analysts' expectations in terms of turnover, but exceeded them in terms of profit.
Fewer new orders
However, the basis for future results has shrunk somewhat. Order intake fell by 1.3 percent to 8.48 billion Swiss francs. Without the foreign currency effects, however, new orders would have grown. The new installations business declined, particularly in China, Schindler wrote. However, the modernization business and the service business continued to grow.
The market launch of the new standardized modular elevator platform is continuing as planned. In the markets where this is already available, around three quarters of new business is for new generation products.
Previous outlook confirmed
Schindler is maintaining its outlook for the year as a whole. Accordingly, the Group expects sales growth in local currencies in the low single-digit percentage range and an EBIT margin of 11 percent. This includes restructuring costs of CHF 80 million.
Schindler wants to continue to improve under its own steam, explained Chairman of the Board of Directors and CEO Silvio Napoli. The focus is also on simplifying operational processes.
Schindler once again refrained from issuing a profit forecast for the year as a whole. Schindler achieved a net profit of 935 million in 2023.
Share buyback program of 500 million
Schindler also announced a share buyback program for registered shares and participation certificates (PS) with a total value of up to CHF 500 million. This is to begin in November 2024 and be completed by November 2026 at the latest.
The program is to be executed via second trading lines on the SIX Swiss Exchange. The Board of Directors intends to propose capital reductions at future Annual General Meetings by canceling the repurchased registered shares and PS, it said.
"Following the increase in the dividend payout ratio at the beginning of the year, the planned share buyback program is a further step towards increasing the share yield," explained Napoli. However, Schindler's strong balance sheet remains intact.
