Schindler Holding Ltd. · SIX:SCHN

Schindler — Schindler Hldg Ag Akt — Q2 2022 Earnings Presentation

31 slides from Schindler's earnings presentation, Jul 22, 2022

  1. Slide 1: Results as of June 30, 2022

    Results as of June 30, 2022 July 22, 2022 © Schindler 2022 I © Schindler 2022 I We Elevate I July 22, 2022 I

  2. Slide 2: Agenda

    Agenda 1. Overview Silvio Napoli 2. Financial results as of June 30, 2022 Urs Scheidegger 3. Outlook for 2022 Urs Scheidegger 4. Sustainability Silvio Napoli 5. Q&A Silvio Napoli/Urs Scheidegger 2 I © Schindler 2022 I We Elevate I July 22, 2022 I Investor Relations

  3. Slide 3: Intensifying challenges

    Intensifying challenges Wage inflation, China lockdown 2nd wave, and semiconductor shortage accelerate the impact 1. Dealing with foreign exchange burden EUR/CHF –4.9% year-to-date, –6.2% year-on-year 2. Regaining competitive New Installations (NI) margins FY 2022 material cost inflation: CHF 200m c

  4. Slide 4: Further streamlined leadership setup to navigate challenges

    Further streamlined leadership setup to navigate challenges Group Executive Committee reduced from 14 to 10 members Group Executive Committee (as of August 1, 2022) Latest changes: ▪ Supply Chain removed from ExCo Chairman and CEO ▪ New CFO as of September 1st Key changes before April 22, 2022 ▪ Com

  5. Slide 5: Update challenge #2: regaining competitive NI margins

    Update challenge #2: regaining competitive NI margins Price increases gaining traction, impact to materialize with backlog execution Realized price increases New Installations (YTD) Key actions China APAC Americas EMEA w/o China ▪ Inflation clause enforcement: open tenders + backlog -- ▪ Price incre

  6. Slide 6: Update challenge #2: regaining competitive NI margins

    Update challenge #2: regaining competitive NI margins Metals price correction to flow through 6+ months inventory before reaching P&L Semiconductor price surge reflects shortage, affecting current margins and delivery times Steel and aluminum prices Semiconductor prices Key actions 250 200 ▪ Build-u

  7. Slide 7: Update challenge #3 and #4: Supply chain/product complexity

    Update challenge #3 and #4: Supply chain/product complexity Product legacy + semiconductor shortage + China lockdowns on-time delivery overall at ~50% globally On-time delivery (%) Key actions 100 ▪ Complexity management – drastic reduction of options offered ▪ Sales configurator simplified 50 ▪ Sem

  8. Slide 8: Update challenge #5: China NI market to further contract

    Update challenge #5: China NI market to further contract Accelerated market contraction aggravated by lockdowns Lockdown periods Q1 Q2 Key actions XJ Schindler Jan Feb March April May June Henan ▪ Support to China staff in lockdowns ▪ Readiness plan for potential future lockdowns Q1 Q2 Schindler ▪ R

  9. Slide 9: Update challenge #5: Emergency measures to support employees during lockdowns

    Update challenge #5: China NI market to further contract Emergency measures to support our employees during lockdowns 9 I © Schindler 2022 I We Elevate I July 22, 2022 I Investor Relations

  10. Slide 10: Update challenge #5: Top 100 developers: sales, land reserves, purchases down

    Update challenge #5: China NI market to further contract Top 100 developers: sales, land reserves, and purchases significantly down Land reserve (km2) Land purchase (bn RMB) Sales value (bn RMB) 5’000 1’500’000 1000 4’000 3’000 1’000’000 50% 49% 55% 62% 500 56% 2’000 66% 500’000 47% 45% 70% 1’000 0

  11. Slide 11: Update challenge #5: Market contraction above 15% materializing

    Update challenge #5: China NI market to further contract Market contraction above 15% materializing Floor space sold further declined across all city tiers1) Housing inventory back at alert levels months consumption Upper alert level 120% 30 100% Lower alert level 25 80% 60% 20 40% 15 20% 0% 10 -20%

  12. Slide 12: Market development

    Market development Global market burdened by significant NI slowdown in China Market growth China APAC Americas EMEA Global w/o China New Installations Lock- Recovery Driven by Solid across Contraction downs/ residential/ all segments as a result of liquidity Infrastruct- China constraints ure situa

  13. Slide 13: Results in a nutshell

    Results in a nutshell ▪ Order intake and revenue affected by China market contraction and lockdowns ▪ Profit development burdened by cost inflation, semiconductor shortage, supply chain issues and restructuring costs, exacerbated by China lockdowns ▪ Sharpened focus on increasing prices to offset in

  14. Slide 14: Order intake development

    Order intake development Focus on sales margins and global market contraction reflected in slowing growth momentum Second quarter Half-year in CHF million in CHF million +4.01) +3.02) –0.61) 3 106 3 063 –1.42) Q2 2021 Q2 2022 1) Growth in local currencies, in % 2) Growth in % 14 I © Schindler 2022 I

  15. Slide 15: Order intake growth by region and product line (1st half year)

    Order intake growth by region and product line (1st half year) Pick-up in Modernization and Maintenance offset drop in New Installations Growth H1 2022 vs. China APAC w/o China Americas EMEA Global H1 2021 By business (units) New Installations (NI) Maintenance By business (value in LC) New Installat

  16. Slide 16: Revenue development

    Revenue development Growth in all regions vs. significant drop in China Second quarter Half-year in CHF million in CHF million –1.51) –2.42) –4.61) 2 873 2 713 EMEA (–) EUR –5.62) (–) TRY Americas China (+) USD Rest AP (+) RMB (+) BRL (+/–) Others Q2 2021 Q2 2022 <5% 5% to <10% 10% to <20% >20% nega

  17. Slide 17: EBIT adjusted and EBIT development

    EBIT adjusted and EBIT development Persisting pressure from cost inflation, product legacy, semiconductor shortage, supply chain issues and restructuring costs, exacerbated by China lockdowns Second quarter Half-year in CHF million in CHF million –39.81) –31.81) –33.61) –27.01) EBIT adj. EBIT Opera-

  18. Slide 18: Net profit development

    Net profit development Impacted by lower operating result Second quarter Half-year in CHF million in CHF million 455 –34.91) 296 242 –37.21) 152 Q2 2021 Q2 2022 H1 2021 H1 2022 1) Growth in % 18 I © Schindler 2022 I We Elevate I July 22, 2022 I Investor Relations

  19. Slide 19: Cash flow development

    Cash flow development Reduced as a result of lower operating profit and increased net working capital requirements Second quarter Half-year in CHF million in CHF million 721 –58.51) 299 264 –95.11) 13 Q2 2021 Q2 2022 H1 2021 H1 2022 Change –228 –60 NWC 1) Growth in % 19 I © Schindler 2022 I We Eleva

  20. Slide 20: Outlook 2022

    Outlook 2022 20 I © Schindler 2022 I We Elevate I July 22, 2022 I © Schindler 2022

  21. Slide 21: Outlook 2022

    Outlook 2022 As of July 22, 2022 Business environment Key actions ▪ China market contracting, RoW mixed ▪ Price increases across all regions and with slowing momentum product lines ▪ Construction site delays continue to ▪ Accelerated measures to streamline hinder project execution product offering ▪

  22. Slide 22: Sustainability

    I © Schindler 2022 I We Elevate I July 22, 2022 I Investor Relations

  23. Slide 23: Science Based Targets – validated 2040 net-zero roadmap

    Science Based Targets – validated 2040 net-zero roadmap Validated by SBTi Scope 1+2 (absolute CO2e in kt) (Science Based Targets initiative) 300 Near-term Long-term target: target: –50% –90% (net-zero) 150 Scope 1+2 (Company facilities and cars, purchased electricity) –50% 2030 –90%2040 (net-zero) 0

  24. Slide 24: Q&A

    Results as of June 30, 2022 Q&A July 22, 2022 © Schindler 2022 I © Schindler 2022 I We Elevate I July 22, 2022 I

  25. Slide 25: Additional charts

    Additional charts 25 I © Schindler 2022 I We Elevate I July 22, 2022 I Investor Relations

  26. Slide 26: Key figures as of June 30, 2022 – April to June

    Key figures as of June 30, 2022 April to June In CHF million Q2 2022 Q2 2021 r% r% in LC Order intake 3 063 3 106 –1.4 –0.6 Revenue 2 713 2 873 –5.6 –4.6 Operating profit (EBIT) 192 319 –39.8 –38.2 in % 7.1 11.1 Operating profit (EBIT), adjusted 230 1) 337 2) –31.8 –30.3 in % 8.5 11.7 Financing and

  27. Slide 27: Key figures as of June 30, 2022 – January to June

    Key figures as of June 30, 2022 January to June In CHF million 1H 2022 1H 2021 r% r% in LC Order intake 6 227 6 043 3.0 4.0 Revenue 5 345 5 475 –2.4 –1.5 Operating profit (EBIT) 403 607 –33.6 –32.3 in % 7.5 11.1 Operating profit (EBIT), adjusted 466 1) 638 2) –27.0 –25.7 in % 8.7 11.7 Financing and

  28. Slide 28: Quarterly overview

    Quarterly overview Key figures In CHF million 2022 2021 Q2 Q1 Q4 Q3 Q2 Q1 Order intake 3 063 3 164 3 128 2 995 3 106 2 937 Revenue 2 713 2 632 2 954 2 807 2 873 2 602 Operating profit (EBIT) 192 211 253 306 319 288 in % 7.1 8.0 8.6 10.9 11.1 11.1 Operating profit (EBIT), adjusted 230 236 306 308 337

  29. Slide 29: Balance sheet

    Balance sheet In CHF million 30.06.2022 in % 31.12.2021 in % 30.06.2021 in % Cash and cash equivalents 2 408 20.2 2 841 23.7 2 425 20.8 Other current assets 5 689 47.6 5 436 45.4 5 470 47.0 Total current assets 8 097 67.8 8 277 69.1 7 895 67.8 Non-current assets 3 844 32.2 3 697 30.9 3 741 32.2 Tota

  30. Slide 30: Order intake growth by region and product line (2nd quarter)

    Order intake growth by region and product line (2nd quarter) Strong growth in Existing Installations couldn’t fully offset sharp New Installations decline Growth Q2 2022 vs. China APAC w/o China Americas EMEA Global Q2 2021 By business (units) New installations (NI) Maintenance By business (value in

  31. Slide 31: Financial calendar 2022/2023

    Financial calendar 2022/2023 2022 2023 Publication of key figures as of September 30 October 20 October Full year results media conference February Ordinary General Meeting Schindler Holding Ltd. March 28 Publication of key figures as of March 31 April Publication of Interim Report as of June 30 Jul

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