Pleasing growth and improved profitability
Ebikon, Switzerland, 16-Aug-2016 — /EuropaWire/ — In the first half of 2016, Schindler pursued its growth strategy while, at the same time, improving profitability. In spite of the softening of the global new installations market, Schindler reported a 2.1% increase in orders received to CHF 5 083 million, corresponding to an increase of 2.3% in local currencies.
Schindler increased revenue by 3.4% to CHF 4 645 million in the first half of 2016 (+3.9% in local currencies). Operating profit (EBIT) rose by 5.9% to CHF 504 million (+7.6% in local currencies) and the EBIT margin reached 10.9% (first half of 2015: 10.6%), or 11.1% before restructuring costs. Net profit improved by 3.9% to CHF 372 million.
Orders received exceed CHF 5 billion
In the first half of 2016, orders received grew by 2.1% to CHF 5083 million (first half of 2015: CHF 4977 million), corresponding to an increase of 2.3% in local currencies. The Europe and Americas regions produced the strongest growth. Developments in Asia-Pacific were mixed, with the weakening Chinese market having an adverse impact, while the other countries in the region generated good growth. In spite of the softening of the global new installations market, Schindler was able to increase its order intake thanks to the execution of its growth strategy.
In the second quarter of 2016, orders received rose by 3.2% to CHF 2616 million (second quarter of 2015: CHF 2534 million), equivalent to an increase of 2.6% in local currencies.
The order backlog totaled CHF 9910 million as of June 30, 2016, representing a 5.8% increase compared to CHF 9364 million as of December 31, 2015, corresponding to growth of 7.0% in local currencies.
In addition, Schindler strengthened its market presence in China with the acquisition of a minority stake in Volkslift Elevator (China) Co. Ltd., as well as in Germany with the acquisition of FB Group. The completion of the transaction in China is subject to approval by the relevant local authorities.
Pleasing growth in revenue
In the first half of 2016, revenue rose by 3.4% to CHF 4 645 million (first half of 2015: CHF 4 492 million), or 3.9% in local currencies. The Americas region achieved the strongest growth, followed by Europe and Asia-Pacific.
In the second quarter of 2016, revenue grew by 4.8% to CHF 2469 million (second quarter of 2015: CHF 2355 million), equivalent to an increase of 4.4% in local currencies.
Improved operating profit and margin
Operating profit (EBIT) improved to CHF 504 million in the first half of 2016 (first half of 2015: CHF 476 million). This corresponds to an increase of 5.9% in Swiss francs and 7.6% in local currencies.
In the second quarter of 2016, operating profit rose to CHF 269 million (second quarter of 2015: CHF 254 million). Both in Swiss francs and local currencies, operating profit grew by 5.9%. Restructuring costs incurred in the second quarter had a negative impact on operating profit of CHF 10 million.
In the first half of 2016, the EBIT margin rose to 10.9% (first half of 2015: 10.6%), or 11.1% before restructuring costs. In the second quarter of 2016, the EBIT margin reached 10.9% (second quarter of 2015: 10.8%), corresponding to 11.3% before restructuring costs. The increase in profitability was primarily driven by efficiency and cost optimization.
Net profit and cash flow
In the first half of 2016, net profit increased by 3.9% to CHF 372 million (first half of 2015: CHF 358 million).
Cash flow from operating activities decreased by 9.5% to CHF 427 million (previous year: CHF 472 million) as net working capital improved only marginally compared to the first half of 2015.
Outlook for 2016
Schindler continues to expect that the global elevator and escalator market will experience a slight decline in 2016 due primarily to weakening markets in China and Latin America. The markets in Asia-Pacific, excluding China, and in Europe are likely to achieve further moderate growth. In North America, Schindler continues to expect solid market growth. Furthermore, pricing pressure may persist in many markets.
For the full year 2016 – excluding any unforeseeable events – Schindler expects revenue growth of 3% to 5% in local currencies and a net profit of CHF 750 million to CHF 800 million.
For further information:
Dr. Barbara Schmidhauser, Chief Communications Officer
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Marco Knuchel, Head Investor Relations
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