Elevator maker Schindler expects solid margin growth in 2024 and mid-term
By Ozan Ergenay and Louis van Boxel-Woolf
Feb 14 (Reuters)
Swiss elevator maker Schindler on Wednesday forecast improved margins for 2024 and the mid-term, after posting annual results that were slightly above expectations amid challenging business conditions.
The company forecast an earnings before interest and taxes (EBIT) margin of 11% in 2024 and 13% in the medium term, after saying it expected low single-digit revenue growth in local currency terms for 2024.
Net profit rose 41.9% in 2023 to 935 million Swiss francs ($1.06 billion), beating analysts' forecast of 910.4 million francs according to a poll compiled by Vara Research.
"First time Schindler provides margin guidance at the beginning of the year, which could also be perceived as a good signal of management's confidence in its ability to achieve margin improvement," Oddo BHF analyst Delphine Brault told Reuters.
Efficiency savings and progress in dealing with a backlog of relatively unprofitable orders lodged in 2022 would boost margins, the company said, with 70% of the orders now executed.
An EBIT margin of 13% would be Schindler's best ever, noted analysts at the Zuercher Kantonalbank in a note.
Schindler has benefited from an easing of global supply chain disruptions, which had affected the deliveries of elevators and escalators to clients.
Its shares were up 2.2% as of 1010 GMT.
The Swiss group also committed to raise its payout ratio range to 50-80% from 35-65% now, in a move that James Moore of Redburn Atlantic said would be seen as "sign of confidence and taken well".
Finnish elevator and escalator maker Kone last month forecast 2024 sales in line or slightly above last year's level, after its fourth-quarter results beat expectations.
Schindler will publish its 2024 net profit guidance with the publication of its half-year results in July.
($1 = 0.8858 Swiss francs)
(Reporting by Ozan Ergenay and Louis van Boxel-Woolf; Editing by Kim Coghill and Eileen Soreng)