Schindler Earnings: Strong Modernization and Service Orders Offset Still Weak New Equipment Demand

Wide-moat Schindler Holding delivered a buoyant fourth-quarter 2023 result that highlights the underlying resilience of its business model. Fourth-quarter order intake pleased investors, rising 1.5% year on year in constant-currency terms, with strong demand for modernization and maintenance service in late 2023 offsetting continuing weakness in orders for new equipment. Full-year 2023 order intake was CHF 11.4 billion in 2023—up 1.7% on a constant-currency basis, broadly according with our full-year expectations for modest growth in order intake as Schindler’s order intake returned to growth in the second half. Schindler’s top line also tracked our expectations in 2023, with full-year revenue increasing to CHF 11.5 billion, up 7% year on year in constant-currency terms. Nonetheless, full-year 2023 EBIT of CHF 1.25 billion was slightly ahead of our expectations owing to better realization of operational and supply chain efficiencies than we’d previously credited.