Statement of the Board of Directors

Inclusion into CDP A list

Digitally connected units increased by 27%

In 2022, Schindler faced a mix of challenges that were unprecedented in their magnitude and complexity. The economic slowdown in China, COVID-related lockdowns, persistent supply chain disruptions, and steep inflation weighed negatively on our business. Schindler’s performance was also impacted by a number of internal issues, including difficulties in the introduction of a new modular elevator platform, combined with delays in phasing out legacy products.

Sharpened focus

These circumstances called for immediate action. We streamlined our product offering, increased prices, and have been driving efficiency across the whole organization to offset inflation since February 2022. The stabilizing measures have started to pay off. Nonetheless, resolving legacy issues and adjusting to the fast-evolving market conditions will require more time.

Modular elevator platform

The year 2022 was challenging for our manufacturing setup. We have been phasing out legacy products while simultaneously ramping up modular elevator orders. This resulted in increased complexity which, combined with semiconductor shortages, led to major disruptions in our supply chain. We introduced several measures to improve the situation and to secure timely delivery to our customers, while simplifying the modular product offering.

Financial performance

In 2022, order intake decreased by 1.7% to CHF 11 961 million, corresponding to –0.2% in local currencies. Revenue increased by 1.0% to CHF 11 346 million, equivalent to +2.5% in local currencies. Operating profit reached CHF 904 million, corresponding to an EBIT margin of 8.0% (EBIT adjusted 9.2%). Net profit totaled CHF 659 million, and cash flow from operating activities reached CHF 688 million.

The Top Speed 23 program, designed to strengthen profitability and to consolidate our position in key markets, continued in 2022 with a cost of CHF 72 million. In line with our operational priorities, we completed two of its six core initiatives in 2022.

Streamlined senior leadership structure

Intensifying challenges called for a streamlined senior leadership setup to drive effective and faster decision-making with greater impact. As of January 21, 2022, Silvio Napoli took on the combined role of Chairman of the Board of Directors and CEO of Schindler Group after Thomas Oetterli had stepped down from the CEO role. At the same time, Paolo Compagna was appointed Chief Operating Officer. As of September 1, 2022, Carla De Geyseleer joined the Group Executive Committee as CFO, succeeding Urs Scheidegger.

Schindler’s Group Executive Committee was reduced from 13 to 10 members and is now composed as follows: Silvio Napoli (Chairman and CEO), Paolo Compagna (COO and Deputy CEO), Julio Arce (Europe South), Matteo Attrovio (CIO), Karl-Heinz Bauer (CTO), Carla De Geyseleer (CFO), Meinolf Pohle (Europe North), Robert Seakins (Asia-Pacific), Tobias B. Staehelin (Human Resources), and Daryoush Ziai (China).

Cloud-based service business

We made good progress in growing our connected portfolio, with more than a quarter of our installed units now linked to the cloud. The business model has proven successful with reduced callbacks and higher customer satisfaction. Mass connectivity also provides a powerful means to reduce carbon emissions. Cloud-based remote monitoring results in higher uptime and less physical visits. If these are still required and conducted by using an electric vehicle, CO₂ emissions can be cut by up to 99.5%. Based on this data, we launched a Green Service contract in Germany, officially certified by TÜV Rheinland.

Our commitment to climate action

In 2022, we further ramped up our ESG efforts, including committing to reaching net-zero greenhouse gas emissions by 2040, a plan approved by the Science Based Targets initiative (SBTi). Out of more than 3 300 companies that have committed to setting themselves science-based targets, Schindler is one of the very few with such ambitious and validated goals to date. Our efforts to fight climate change have been recognized with the inclusion in the CDP A list.

With our first five-year Sustainability Road Map, we met five of our six targets set in 2017. We, however, slightly missed (by –0.3%) our 25% CO₂ emission reduction target of our global vehicle fleet due to a slower than planned conversion to e-mobility related to global auto­motive supply difficulties.

BuildingMinds

Our Berlin-based “Software as a Service” (SaaS) company continues to reshape the real estate industry. The BuildingMinds platform enables real estate owners and managers to take data-driven decisions to drive portfolio performance, both in terms of day-to-day operations and long-term strategy. Within three years of its inception, the BuildingMinds platform already covers over 15 000 buildings worldwide.

Profit and dividend

Schindler Holding Ltd. closed the year 2022 with a net profit of CHF 709 million (previous year: CHF 689 million). The Board of Directors will submit a proposal to the forthcoming General Meeting of March 28, 2023, for a dividend of CHF 4.00 per registered share and per participation certificate.

Outlook for 2023

With the ongoing slowdown of the global economy combined with the pressure on the real estate and construction sectors, Schindler anticipates New Installation markets to decline further. Modernization and Service markets are expected to keep growing across all regions.

In response to this challenging environment, Schindler will continue to focus on enhancing efficiency and supply chain resilience, aiming to drive customer value, based on digital and sustainable products and services.

For 2023, barring unexpected events, Schindler expects low single-digit revenue growth in local currencies. As in previous years, net profit guidance will be provided at the half-year results publication.

Thank you

We thank our customers for their business and confidence in our products and services. Together we shape more livable and sustainable cities. We are also deeply grateful to our shareholders for their trust and for their essential support. Finally, we would like to recognize the unwavering efforts and extraordinary contribution of our employees, despite the challenges we have been facing.

Silvio Napoli

Chairman of the Board of Directors and CEO

Prof. Dr. Pius Baschera

Vice Chairman of the Board of Directors