Statement of the Board of Directors
Refocused strategy continues to drive performance improvement
Further mass connectivity boost with >30% of Service portfolio now linked to cloud
New standardized modular elevator platform ready for global launch
In 2023, Schindler continued to deliver on its commitment to grow sustainably and profitably despite weakening global construction markets and increasing foreign exchange headwinds. Profitability was significantly enhanced thanks to the operational measures introduced in 2022. The new, streamlined organizational set-up matured and contributed to faster decision-making and improved adaptability. Delivering in such a challenging environment called for even stronger focus and execution discipline.
Refocused strategic framework
In early 2023, we refocused our strategic framework with the company’s purpose at the core, spelling out consistent strategic choices, priorities, and targets. The framework gives a clear structure of how to meet our ambition to be the preferred choice for our customers and for our employees, while at the same time creating sustainable value for all stakeholders.
New standardized modular elevator platform
Our new standardized modular platform is ready to be launched globally over the course of the next two years, starting in key European markets. This streamlined, highly energy-efficient product range finally brings to market the radical complexity reduction necessary to regain competitiveness. The platform combines state-of-the-art mechanical and digital technologies, meeting the highest cybersecurity standards and creating an immersive user experience. Developed in close collaboration with architects, high-tech, sustainable decor choices allow for contemporary interior design.
Advancing our sustainability efforts
We continued to drive our sustainability agenda, with the intention to reach net-zero greenhouse gas emissions by 2040, a commitment based on an SBTi-approved plan in line with the goals of the Paris Agreement.
In 2023, our efforts to fight climate change have been reconfirmed with the continued inclusion in the CDP A list of companies operating according to the highest environmental standards.
Commitment to people
In a study conducted jointly by the US news magazine Newsweek and the market research company Statista, in which 70 000 people worldwide took part and 269 000 company evaluations were analyzed, Schindler was named one of the ten most trustworthy companies in the “machines & industrial equipment” sector.
Schindler has also received awards as a top employer in numerous countries.
Innovative cloud-based service model
Cloud connectivity is an essential component of the growing range of low-carbon service offerings that we launched in various countries in 2023. With more than 30% of our installed units now linked to the cloud, Schindler can monitor and improve their performance remotely via cloud-based algorithms, resulting in higher uptime and better customer experience.
Transforming existing buildings to future-proof cities
Urban fabrics are changing. With more than 80% of the buildings that will be present in 2050 already existing today, converting monofunctional constructions into mixed-use structures offers a smart and sustainable way forward to rejuvenate city centers. In 2023, we introduced Schindler MetaCore, the latest addition to our Schindler PORT transit management solutions, to flexibly repurpose buildings and significantly extend their life span.
BuildingMinds
Our Berlin-based “Software as a Service” (SaaS) company continues to drive digital transformation in the real estate industry. The BuildingMinds platform offers building owners and managers a digital twin of their buildings, supporting data-driven decisions to enhance operational performance and climate-related transformation. As of the end of 2023, more than 22 000 buildings worldwide were managed using the BuildingMinds platform.
Financial performance
In 2023, both order intake and revenue increased to CHF 11 439 million and CHF 11 494 million, respectively. In local currencies the growth was 1.7% and 7.4%. Operating profit increased by 39.6% in local currencies to CHF 1 188 million, corresponding to an EBIT margin of 10.3% (EBIT adjusted 10.9%). Net profit rose significantly to CHF 935 million, corresponding to a net profit margin of 8.1%. Cash flow from operating activities increased by 84.7% to CHF 1 271 million.
The Top Speed 23 program came to a close by the end of 2023. Launched in 2021 to gain business resilience, it accelerated investments in competitive products, in digital service offering, and in cutting-edge technologies. The total program cost amounted to CHF 167 million over the past three years.
Profit and dividend
Schindler Holding Ltd. closed the year 2023 with a net profit of CHF 685 million (previous year: CHF 709 million). The Board of Directors will submit a proposal to the forthcoming General Meeting of March 19, 2024, for a dividend of CHF 4.00 per registered share and per participation certificate. In addition, an extraordinary dividend of CHF 1.00 per registered share and participation certificate will be proposed to mark the 150th anniversary of the company.
The Board of Directors has decided to amend the dividend policy and increased the payout ratio range to 50% – 80% (currently: 35% – 65%).
Outlook
For 2024, barring unexpected events, Schindler expects a low single-digit revenue growth in local currencies, for an EBIT reported margin of 11%. Going forward, consistently with the commitment to continue driving for higher competitiveness, Schindler aims to reach an EBIT reported level of 13% in the midterm.
Thank you
The year 2024 marks Schindler’s 150th anniversary, a milestone built on the trust of our customers, on the relentless support of our shareholders, and on the extraordinary contributions of our employees. Together, we enhance the quality of urban living. With this in mind, we express our deep gratitude.
Silvio Napoli
Chairman of the Board of Directors and CEO
Patrice Bula
Vice Chairman of the Board of Directors