Schindler Holding ((CH:SCHP)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Schindler Holding presented a generally positive outlook, highlighting strong performance in order growth, modernization, and operating margins. Despite these achievements, the company faces challenges in the Chinese market, currency headwinds, and potential tariff impacts, which balance out the positive results.
Order Growth and Modernization Success
Schindler reported impressive order growth, exceeding 5% in local currencies, with their Modernization business growing by 22% in the first half of 2025. The second quarter saw accelerated double-digit growth in all regions for modernization, underscoring the company’s strategic focus on this segment.
Strong Operating Margin and Cash Flow
The company achieved a robust operating margin of 12.3% in the first half of 2025, driven by efficiency improvements. Operating cash flow was also strong, reaching CHF 703 million, which marks an increase from last year’s already strong levels.
Positive Market Response to New U.S. Product
Schindler’s new U.S. mid-rise product was met with overwhelming positive customer response. The successful initial installations have set the stage for a continued rollout, indicating strong future potential in this market.
Challenges in China New Installations
The Chinese market poses significant challenges for Schindler, with the New Installation market declining by high single-digits. The second quarter experienced a 30% drop, primarily due to prolonged market weakness, impacting the company’s overall performance.
Currency and Tariff Headwinds
Schindler is facing substantial currency headwinds due to a strengthening Swiss franc, coupled with potential tariff impacts estimated at approximately CHF 20 million. These factors are expected to affect the company’s financial performance.
Lowered China Service Market Outlook
The outlook for the China Service market has been reduced, as fewer units are being converted to the installed base, impacting global figures. This adjustment reflects the ongoing challenges in the Chinese market.
Forward-Looking Guidance
Looking ahead, Schindler’s management has provided guidance for the remainder of the fiscal year, projecting low single-digit revenue growth in local currencies and aiming for a reported EBIT margin of 12%. The company plans to maintain operating efficiency and manage restructuring costs, particularly in China, to adapt to market conditions.
In summary, Schindler Holding’s earnings call reflected a positive sentiment with strong order growth and modernization success. However, challenges in the Chinese market and external headwinds present hurdles. The company remains focused on efficiency and strategic initiatives to navigate these challenges and sustain growth.