Schindler Management Ltd.
Corporate Communications
Ad hoc announcement pursuant to Art. 53 LR
Interim Report as of June 30, 2022
Press release
July 22, 2022
Intensifying challenges
- Order intake and revenue growth affected by China market contraction and COVID-related lockdowns
- Profit development burdened by cost inflation, semiconductor shortage, supply chain issues, and restructuring costs, exacerbated by lockdowns in China
- Sharpened focus on increasing prices to offset inflation, streamlining product offering, anddriving efficiency
- Order backlog reaching the 10-billion milestone
- Further changes to the Group Executive Committee
- 2040 net-zero emission targets approved by the Science Based Targets initiative
In the first six months of 2022, Schindler's business continued to be under pressure, particularly due to the slowdown of the Chinese economy, COVID-related lockdowns, persistent supply chain disruptions, and steep inflation. Order intake rose by 3.0% to CHF 6 227 million
and revenue decreased by 2.4% to CHF 5 345 million, while operating profit dropped to CHF 403 million, corresponding to an EBIT margin of 7.5% (EBIT adjusted 8.7%). Net profit amounted to CHF 296 million, and cash flow from operating activities reached CHF 299 million.
"We continue to face a unique mix of challenges, unprecedented in their magnitude and complexity. The supply chain issues combined with the aggravated situation in China and sharply rising inflation have been weighing on our results in the first six months of the year," said Silvio Napoli, Schindler's Chairman and CEO. "The performance and profitability enhancing measures we have been accelerating since February are starting to yield benefits. Their full impact, however, will take time to flow through the execution of our growing order backlog."
Order intake and order backlog
Order intake rose by 3.0% to CHF 6 227 million in the first half of 2022 (previous year: CHF 6 043 million), corresponding to an increase of 4.0% in local currencies. The Americas and EMEA regions recorded positive growth, while Asia-Pacific suffered from the significant contraction of the Chinese new installations market.
As a result, New Installations overall recorded a decline, which was offset by growth in Maintenance and by an uptake in Modernization and Repairs orders.
In the second quarter of 2022, the growth momentum receded, with order intake reaching CHF 3 063 million (second quarter of 2021: CHF 3 106 million), corresponding to a decline of 1.4%, or 0.6% in local currencies.
Schindler Group - Key figures as of June 30, 2022 | Page | 1 |
Schindler Management Ltd.
Corporate Communications
As of June 30, 2022, order backlog increased by 6.6% to CHF 10 257 million (previous year: CHF 9 623 million). In local currencies, the order backlog rose by 8.3%.
Revenue
In the first half of 2022, revenue reached CHF 5 345 million (previous year: CHF 5 475 million), for a drop of 2.4% (-1.5% in local currencies). The increase in the EMEA and Americas regions was offset by a decline in the Asia-Pacific region, where COVID-related lockdowns in China heavily affected the economy and supply chains.
In the second quarter of 2022, revenue decreased by 5.6% to CHF 2 713 million (previous year: CHF 2 873 million), corresponding to a drop of 4.6% in local currencies.
Operating profit (EBIT)
As a result of declining top-line growth, cost inflation, semiconductor shortage, supply chain issues, and restructuring costs, operating profit dropped in the first half to CHF 403 million (previous year: CHF 607 million). The EBIT margin reached 7.5% (previous year: 11.1%).
EBIT adjusted reached CHF 466 million with a margin of 8.7% (previous year: CHF 638 million; 11.7%).
In the second quarter of 2022, operating profit amounted to CHF 192 million (previous year: CHF 319 million).
The EBIT margin was 7.1% (previous year: 11.1%). The adjusted EBIT margin reached 8.5% (previous year: 11.7%).
Net profit and cash flow from operating activities
Net profit totaled CHF 296 million (previous year: CHF 455 million) for the first half of 2022. Cash flow from
operating activities reached CHF 299 million (previous year: CHF 721 million), due to lower operating profit and increased net working capital requirements.
Changes to the Group Executive Committee
Urs Scheidegger, CFO, will leave the Group Executive Committee to become Chief Risk Officer, effective September 1, 2022. In his new position he will report to the Supervisory and Strategy Committee.
He will be succeeded by Carla De Geyseleer, who will join the Group Executive Committee as CFO, effective September 1, 2022. Carla brings with her a wealth of international corporate finance experience in publicly listed companies. Most recently, she served as Volvo Cars Group CFO. Prior to that, Carla was CFO at Société Générale de Surveillance (SGS) and held various senior leadership positions in finance and controlling at Vodafone and DHL. Carla is a non-executive board member at Hilti and Polestar and a member of the advisory board of the University of Geneva.
Sabine Siméon-Aissaoui, responsible for Supply Chain, will step down from the Group Executive Committee, effective July 31, 2022, and leave the company.
As of September 1, 2022, the Group Executive Committee will be composed of the following members:
Silvio Napoli (Chairman and CEO), Paolo Compagna (COO and Deputy CEO), Julio Arce (Europe South), Matteo Attrovio (CIO), Karl-Heinz Bauer (CTO), Carla De Geyseleer (CFO), Meinolf Pohle (Europe North), Robert Seakins (Asia-Pacific), Tobias B. Staehelin (Human Resources), and Daryoush Ziai (China and Escalators).
Schindler Group - Key figures as of June 30, 2022 | Page | 2 |
Schindler Management Ltd.
Corporate Communications
Commitment to 2040 net-zero greenhouse gas emissions
With the release of the 2021 Corporate Responsibility report in June, Schindler announced its commitment to reaching net-zero greenhouse gas emissions by 2040. This resolve was validated by the Science Based Targets initiative (SBTi), the global body that supports companies setting emissions reduction targets in line with the goals of the Paris Agreement. To date, Schindler is one of the very few companies that have committed to reach net-zero across the value chain by 2040, out of more than 3 300 companies that have committed to set themselves science-based targets.
The 2021 Corporate Responsibility report illustrates the many ways in which Schindler works with customers to help them meet their own climate targets and engages with other players in the construction and real estate ecosystem to drive meaningful change. Schindler's 2021 Corporate Responsibility report is the tenth published to date.
Outlook for 2022
Schindler anticipates the slowing growth momentum to continue. In addition, cost inflation, persistent foreign exchange pressure, construction site delays, and supply chain issues are expected to impact our business negatively. Assuming no further lockdowns and no other unexpected events, Schindler foresees revenue growth of -2% to +2% in local currencies and net profit between CHF 620 million and CHF 660 million for full year 2022.
For further information:
Nicole Wesch, Head Global Communications & Marketing
Tel. +41 41 445 50 90, nicole.wesch@schindler.com
Marco Knuchel, Head Investor Relations
Tel. +41 41 445 30 61, marco.knuchel@schindler.com
group.schindler.com
Dial-in details to today's conference call at 10:00 am CET are available at: group.schindler.com/en/investor-relations/events.html
Schindler Group - Key figures as of June 30, 2022 | Page | 3 |
Schindler Management Ltd.
Corporate Communications
Key figures as of June 30, 2022 1st half: January to June
% local | ||||||||
In CHF million | 2022 | 2021 | % | currencies | ||||
Order intake | 6 227 | 6 043 | 3.0 | 4.0 | ||||
Revenue | 5 345 | 5 475 | -2.4 | -1.5 | ||||
Operating profit (EBIT) | 403 | 607 | -33.6 | -32.3 | ||||
in % | 7.5 | 11.1 | ||||||
Operating profit (EBIT), adjusted | 4661 | 638 | 2 | -27.0 | -25.7 | |||
in % | 8.7 | 11.7 | ||||||
Financing and investing activities | -19 | -24 | ||||||
Profit before taxes | 384 | 583 | -34.1 | |||||
Income taxes | 88 | 128 | ||||||
Net profit | 296 | 455 | -34.9 | |||||
Earnings per share and participation certificate in CHF | 2.54 | 4.00 | -36.5 | |||||
Cash flow from operating activities | 299 | 721 | -58.5 | |||||
Investments in property, plant, and equipment | 58 | 57 | 1.8 | |||||
30.06.2022 | 31.12.2021 | |||||||
Order backlog | 10 257 | 9 565 | 7.2 | 6.3 | ||||
Number of employees | 69 429 | 69 015 | 0.6 |
- Adjusted for Top Speed 23 costs (CHF 31 million), restructuring costs (CHF 20 million), and expenses for BuildingMinds (CHF 12 million)
- Adjusted for Top Speed 23 costs (CHF 4 million), restructuring costs (CHF 15 million), and expenses for BuildingMinds (CHF 12 million)
Schindler Group - Key figures as of June 30, 2022 | Page | 4 |
Schindler Management Ltd.
Corporate Communications
2nd quarter: April to June
% local | ||||||||
In CHF million | 2022 | 2021 | % | currencies | ||||
Order intake | 3 063 | 3 106 | -1.4 | -0.6 | ||||
Revenue | 2 713 | 2 873 | -5.6 | -4.6 | ||||
Operating profit (EBIT) | 192 | 319 | -39.8 | -38.2 | ||||
in % | 7.1 | 11.1 | ||||||
Operating profit (EBIT), adjusted | 2301 | 337 | 2 | -31.8 | -30.3 | |||
in % | 8.5 | 11.7 | ||||||
Financing and investing activities | 4 | -11 | ||||||
Profit before taxes | 196 | 308 | -36.4 | |||||
Income taxes | 44 | 66 | ||||||
Net profit | 152 | 242 | -37.2 | |||||
Earnings per share and participation certificate in CHF | 1.30 | 2.12 | -38.7 | |||||
Cash flow from operating activities | 13 | 264 | -95.1 | |||||
Investments in property, plant, and equipment | 34 | 27 | 25.9 | |||||
30.06.2022 | 30.06.2021 | |||||||
Order backlog | 10 257 | 9 623 | 6.6 | 8.3 | ||||
Number of employees | 69 429 | 67 234 | 3.3 |
- Adjusted for Top Speed 23 costs (CHF 15 million), restructuring costs (CHF 17 million), and expenses for BuildingMinds (CHF 6 million)
- Adjusted for Top Speed 23 costs (CHF 4 million), restructuring costs (CHF 7 million), and expenses for BuildingMinds (CHF 7 million)
Schindler Group - Key figures as of June 30, 2022 | Page | 5 |
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Schindler Holding Ltd. published this content on 22 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 July 2022 04:23:02 UTC.