Schindler's First-Quarter Margin Hampered by Raw Material Inflation

Schindler reported a mixed first quarter with year-over-year growth in orders and revenue but a margin contraction driven largely by steel cost inflation. The company's operating profit margin contracted by 100 basis points year over year to 8%. Supply chain disruptions continued to affect order execution with the book/bill ratio above 1 times, at 1.2 times, and order growth outpaced revenue growth significantly. Orders grew by 7.7% while revenue was up just 1%. We maintain our fair value estimate and wide moat rating.