Schindler H1 2025 presentation: Margin expansion continues despite FX headwinds

Introduction & Market Context

Schindler Holding AG (SIX:SCHN) presented its H1 2025 results on July 18, 2025, highlighting continued margin expansion and profit growth despite significant foreign exchange headwinds and regional market challenges. The elevator and escalator manufacturer reported accelerated order growth in local currency terms, particularly in its modernization segment, while maintaining its full-year guidance for 2025.

The presentation comes amid a mixed global market environment for the elevator industry, with strong service and modernization demand contrasting with continued weakness in new installations, particularly in China. This divergence in segment performance reflects broader construction market trends and Schindler’s strategic focus on higher-margin business areas.

Executive Summary

Schindler reported H1 2025 order intake of CHF 5,886 million, representing a 1.8% increase in Swiss francs and a more robust 5.3% growth in local currency terms compared to H1 2024. Revenue reached CHF 5,487 million, declining 1.9% in Swiss francs but growing 1.4% in local currency. The company achieved notable margin expansion with reported EBIT of CHF 675 million, up 9.2% year-over-year, resulting in a 130 basis point improvement in EBIT margin.

As shown in the following comprehensive H1 2025 financial overview:

Net profit for H1 2025 increased 7.5% to CHF 531 million, with earnings per share rising 8.3% to CHF 4.68. Operating cash flow improved 4.0% to CHF 703 million, reflecting stronger profitability despite working capital challenges.

Quarterly Performance Highlights

For Q2 2025 specifically, Schindler reported mixed results with order intake of CHF 2,939 million, down 1.9% in Swiss francs but up 4.6% in local currency compared to Q2 2024. Revenue declined 5.7% to CHF 2,755 million in Swiss francs but showed marginal growth of 0.4% in local currency. Operating profit increased 6.1% to CHF 346 million, with net profit rising 4.6% to CHF 274 million.

The quarterly performance data reveals the significant impact of foreign exchange movements on Schindler’s reported results:

The company’s Q2 performance showed robust operating metrics when viewed in local currency terms, as illustrated in this comparative chart:

Detailed Financial Analysis

Schindler’s revenue and order intake were significantly impacted by foreign exchange headwinds in Q2 2025. While organic growth contributed positively, particularly in the modernization segment, currency effects substantially reduced reported figures. The following breakdown illustrates these impacts:

Operating profit showed marked improvement despite these challenges, driven primarily by operational efficiency gains, favorable pricing, and product mix. The company achieved a Q2 EBIT of CHF 346 million, representing a 6.1% increase in Swiss francs and a 13.2% increase in local currency.

Net profit margins continued to expand, reaching 9.9% in Q2 2025 compared to 9.0% in Q2 2024. This improvement reflects Schindler’s successful execution of efficiency initiatives and focus on higher-margin business segments.

Cash flow performance remained solid despite quarterly fluctuations. H1 2025 operating cash flow increased 4.0% to CHF 703 million, supported by stronger profitability that offset working capital challenges.

Strategic Initiatives & Regional Performance

Schindler’s presentation highlighted significant regional variations in performance across its business segments. Modernization orders showed exceptional strength across all regions, while new installation orders varied dramatically by geography, with Americas and Asia-Pacific (excluding China) showing growth while EMEA and China experienced declines.

The company’s market outlook for 2025 indicates continued strength in service and modernization segments globally, while new installations face challenges, particularly in China:

Schindler noted several strategic initiatives, including the acceleration of its US mid-rise elevator rollout and organizational realignment in China to adapt to market conditions. The company continues to focus on operational efficiencies to drive margin expansion, with particular emphasis on its service and modernization businesses which offer more stable revenue streams and higher margins than new installations.

Forward-Looking Statements

Schindler maintained its 2025 guidance, projecting low single-digit local currency revenue growth and an EBIT reported margin of approximately 12%. The company identified both tailwinds and headwinds affecting its outlook:

The guidance reflects management’s confidence in continued operational improvements and growth in service and modernization segments, balanced against ongoing challenges from tariff impacts, China market downturn, wage inflation, and restructuring costs.

Schindler also announced its upcoming Capital Markets Day, scheduled for June 3, 2026, in Ebikon, Switzerland, where it will likely provide more details on its longer-term strategic initiatives and market outlook.

The company’s balance sheet remains strong, with net liquidity of CHF 3,274 million as of June 30, 2025, providing financial flexibility to navigate market uncertainties and potentially pursue strategic acquisitions or investments.

Full presentation:

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