2022 Is Likely to Be a Transition Year for Schindler

Schindler's long-term revenue growth is modest, but stable. Roughly 70% of group revenue comes from Western markets, where growth is dependent on upgrades to existing elevators as opposed to new installation growth. (Developing markets have higher new installation growth potential due to urbanization and multidwelling unit growth.) The U.S. and Europe account for roughly 60% of the global market for elevator existing upgrades or "modernizations." While revenue growth from modernization might be slower in the short term relative to new installations, they can underpin margins and returns as they offer lower cost revenue from a sales standpoint. Modernizations eventually become required spending by customers due to safety reasons and are mainly carried but the OEM.