Slide 1: Welcome to Schindler: Presentation of Annual Results 2013
Ping An Finance Center, 660m office tower; Shenzhen, China 33 Schindler 7000 double-deck units, PORT technology Welcome to Schindler Presentation of Annual Results 2013 Lucerne, February 14, 2014
Slide 2: Schindler presentation
Schindler presentation – Opening / welcome – Business Review 2013 Jürgen Tinggren – Business Outlook 2014 Silvio Napoli – Discussion © Schindler | Annual Results Presentation 2013 | Slide 2
Slide 3: Highlights 2013
Highlights 2013 Strong growth and excellent cash flow enhancement Growth – Orders received up by >5% (>7% in local currencies) – Revenue increased by 7% (+8% in local currencies) – Record order backlog of CHF 7 722 million (+14% in local currencies) Profitability – EBIT declined 9% reflecting transf
Slide 4: Key figures as of December 31, 2013
Key figures as of December 31, 2013 Strong growth and excellent cash flow In CHF million 2013 2012 ∆% ∆% in LC Orders received 9 456 8 967 +5.5 +7.2 Revenue 8 813 8 258 +6.7 +8.4 Operating profit (EBIT) 8961 990 -9.5 -7.6 in % 10.2 2 12.0 Hyundai impairment -219 – Net profit 463 730 -36.6 Net profit
Slide 5: Hyundai impairment
Hyundai impairment Summary of facts – South Korea is one of the largest E&E markets globally – Schindler signed LOI to buy Hyundai E&E (HE) business in 2004 – Schindler purchased 35% of HE outstanding shares – Starting 2006, HE entered in derivative contracts and circular shareholding to boost contr
Slide 6: Hyundai share price development
Hyundai share price development Impairment triggered by 62% drop in share price Net book value Hyundai share price in CHF million in KRW Impairment 1: CHF 155 million 450 400 Impairment 2: CHF 64 million 350 300 250 Historical 200 acquisition cost: CHF 354 150 million Book value: Book CHF 199 value:
Slide 7: LEAP program captured growth but EBIT impact short of target
LEAP program captured growth but EBIT impact short of target Strong growth drivers EBIT impact trailing – Excellent progress in strategic – Negative currency translation markets: impacts: CHF 18 million China, India, SE Asia, and – Restructuring costs (Q4/2013): the Middle East CHF 25 million – New
Slide 8: Global NI E&E market with robust growth in 2013
Global NI E&E market with robust growth in 2013: + 43 500 units China capturing the largest share of the growth NI E&E market (units) 900 +6.0% +4.7% 800 +16.5% 782k 738k 705k 134 700 138 600 605k 137 48 China +40k units 47 500 142 48 AP (ex. China) +5.5k units 48 400 Europe -3k units 300 520
Slide 9: Asia / Pacific and the Middle East: Development 2013
Asia / Pacific and the Middle East: Development 2013 Strong growth continued in emerging markets – China market accelerated in 2013 – In India, market growth continued at a good level – Robust growth in Southeast Asia and the Middle East Schindler achieved above market growth – Excellent order intak
Slide 10: Europe: Development 2013
Europe: Development 2013 Difficult market conditions continued – Markets in southern and eastern Europe declined slightly – Rest of Europe stagnated at the previous year’s levels Schindler performed well in demanding environment – Order intake remained at 2012 good level – New products Schindler 550
Slide 11: Americas: Development 2013
Americas: Development 2013 Mixed growth in Americas – North American market continued recovery from very low level – Brazilian market slowed while rest of Latin America developed positively Schindler maintained its strong market position – Order intake increased, Schindler 3300 and PORT well receive
Slide 12: Order backlog and revenue per market area
Order backlog and revenue per market area Record order backlog provides solid base for future growth Order backlog (+13.8% in LC) 2013 2012 Europe 30% 32% 2013: CHF 7 722 million 2012: CHF 7 083 million Americas 32% 32% Asia / Pacific 38% 36% Revenue (+8.4% in LC) 2013 2012 Europe 45% 46% 2013: CHF
Slide 13: In summary: LEAP accelerates growth
In summary: LEAP accelerates growth Supply chain and efficiency benefits trailing LEAP Initiatives Progress 2013 Growth in strategic markets – Above market growth in China, India and Emerging Markets – Schindler 5500 well received New NI products – Schindler 3600 China accelerating – Organic growth
Slide 14: Schindler presentation
Schindler presentation – Opening / welcome – Business Review 2013 Jürgen Tinggren – Business Outlook 2014 Silvio Napoli – Discussion © Schindler | Annual Results Presentation 2013 | Slide 14
Slide 15: Megatrends support E&E business outlook
Megatrends support E&E business outlook NI E&E market (units) ~7% Megatrends 840k 782k 138 134 +58k units Urbanization 49 48 ROW India +4k Wealth creation in +5k emerging markets AP excl. India 653 599 +49k Energy efficiency Demographic change 2013A 2014E AP AM EU © Schindler | Annual Results Presen
Slide 16: Action plan 2014
STRATEGIC MARKETS Action plan 2014 CUSTOMER FOCUS QUALITY & COMPETITIVENESS – Grow faster than market OBJECTIVES: – Absolute EBIT growth – Differentiation through innovative products and superior service STRATEGIC CUSTOMER QUALITY & MARKETS FOCUS COMPETITIVENESS – China – Premier position in – State
Slide 17: China's market will continue to drive global E&E growth
STRATEGIC MARKETS China’s market will continue to drive global E&E growth CUSTOMER FOCUS QUALITY & COMPETITIVENESS Example of government-planned urban – Slower but more sustainable GDP growth development: From ‘new villages’ – Government-approved construction pipeline to ‘small neighbourhoods’ ensur
Slide 18: Schindler drives China growth through product and geographic coverage
STRATEGIC MARKETS Schindler drives China growth through product and geographic CUSTOMER FOCUS QUALITY & COMPETITIVENESS coverage From 75 in 2013 to 100+ in 2016 Market coverage 2009 2013 Residential Commercial High-rise Orders received new installations Present in 80% of all cities >2 million inhabi
Slide 19: Huge potential in China maintenance market
STRATEGIC MARKETS Huge potential in China maintenance market CUSTOMER FOCUS QUALITY & COMPETITIVENESS Schindler well positioned to capture the opportunity Annual additions to China’s installed EI base are 450- Maintenance portfolio growth 500k units (equivalent to the total portfolio of units unde
Slide 20: India: from scratch to a leading position in 15 years
STRATEGIC MARKETS India: from scratch to a leading position in 15 years CUSTOMER FOCUS QUALITY & COMPETITIVENESS Local production underpins growth in world’s second-largest NI market Branches Orders received new Sales offices installations Training centers Outset of operations 1998 2003 2008 2013 –
Slide 21: APME: New zone structure with dedicated resources
STRATEGIC MARKETS APME: New zone structure with dedicated resources CUSTOMER FOCUS QUALITY & COMPETITIVENESS To focus on the opportunities in S.E. Asia and the Middle East Orders received new installations Country head office 2009 2010 2011 2012 2013 Contribution to global growth by 2025 (%) Middle
Slide 22: Preferred supplier for high-requirement, high-rise solutions
STRATEGIC MARKETS Preferred supplier for high-requirement, high-rise solutions CUSTOMER FOCUS QUALITY & COMPETITIVENESS Worldwide network of 14 High-rise Competence Centers – Customer-tailored solutions with industry-leading project management Europe Ebikon China – High Rise Global HQ – Comprehensiv
Slide 23: Leading position as global escalator provider
STRATEGIC MARKETS Leading position as global escalator provider CUSTOMER FOCUS QUALITY & COMPETITIVENESS – Fastest delivery times Orders received – Widest product range – Outstanding brand equity – New escalator HQ in China to enhance scale economies and market intelligence – Regional competence cen
Slide 24: New FieldLink generation deployed globally
STRATEGIC MARKETS New FieldLink generation deployed globally CUSTOMER FOCUS QUALITY & COMPETITIVENESS Innovative tools and processes improve service speed and quality State-of-the-art mobile platform based on commercially available hardware Integration with ERP Online ordering and overview of
Slide 25: Net Promoter Score (NPS) deployed globally
STRATEGIC MARKETS Net Promoter Score (NPS) deployed globally CUSTOMER FOCUS QUALITY & COMPETITIVENESS A closed loop feedback system designed to improve customer loyalty NPS % Promoters % Detractors More than 250,000 surveys executed in 2013 Schindler’s NPS improved significantly during the year
Slide 26: Our key customers: construction industry players are expanding globally
STRATEGIC MARKETS Our key customers: construction industry players are expanding CUSTOMER FOCUS QUALITY & COMPETITIVENESS globally Oct. 13th, 2013 China developer in $5 billion Brooklyn move Construction companies and property developers increasingly July 29th, 2013 operate across geographies Saud
Slide 27: New world-class manufacturing facilities
STRATEGIC MARKETS New world-class manufacturing facilities CUSTOMER FOCUS QUALITY & COMPETITIVENESS Total capital investment: CHF 300 million - Escalator factory - Elevator factory - Elevator factory - Escalator factory - R&D center - R&D center - China HQ - Test tower - Test tower Shanghai,
Slide 28: Unique global product platforms to drive consistent quality & scale economies
STRATEGIC MARKETS Unique global product platforms to drive consistent quality & CUSTOMER FOCUS QUALITY & COMPETITIVENESS scale economies Gaining momentum across all markets Residential Schindler 3000 Custom modular Schindler 5000 Schindler 3600 Schindler 3300 Schindler 3100 High rise Schindler 7000
Slide 29: Global platforms evolution into market specific products
STRATEGIC MARKETS Global platforms evolution into market specific products CUSTOMER FOCUS QUALITY & COMPETITIVENESS Schindler 3600 gaining momentum in China mass residential segment Innovative features: – Smooth traveling, less noise – Less components, faster to install – Proven quality and safety –
Slide 30: Schindler strives to become the preferred E&E employer globally
STRATEGIC MARKETS Schindler strives to become the preferred E&E employer globally CUSTOMER FOCUS QUALITY & COMPETITIVENESS Focus on talent acquisition and employee engagement Global workforce split by Regions 2003 2008 2013 AP AP 16.8 20.1 AP % % 31.5 EU EU % 40.5 EU 49.9 % 51.6 % AM % AM 31.5 30.0
Slide 31: Megatrends impacting the E&E business
Megatrends impacting the E&E business Medium-term outlook supports Schindler’s growth objectives Megatrends E&E market implications Urbanization – Emerging markets will continue to drive E&E growth > GDP Wealth creation in – Continuous innovation needed to adapt products and services emerging market
Slide 32: Outlook 2014
Outlook 2014 Status as of February 14, 2014 A three-speed world – Continued strong growth in emerging markets, particularly in China, India, Southeast Asia and the Middle East – Recovery in North America continues – European environment remains challenging Schindler – focus on growth and expanding f
Slide 33: Additional Charts
Additional Charts © Schindler | Annual Results Presentation 2013 | Slide 33
Slide 34: Key figures as of December 31, 2013: Q4
Key figures as of December 31, 2013 Q4: October – December In CHF million Q4/2013 Q4/2012 ∆% ∆% in LC Orders received 2 256 2 241 +0.7 +3.6 Revenue 2 367 2 190 +8.1 +10.8 Operating profit (EBIT) 214 1 267 -19.9 -16.9 in % 9.0 2 12.2 Net income from financing and investing activities 3 – Hyundai impa
Slide 35: Quarterly overview 2013/2012
Quarterly overview 2013/2012 2013 2012 In CHF million Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Orders received 2 256 2 340 2 503 2 357 2 241 2 189 2 344 2 193 Revenue 2 367 2 196 2 270 1 980 2 190 2 097 2 067 1 904 Operating profit (EBIT) 214 212 253 217 267 259 250 214 in % 9.0 9.7 11.1 11.0 12.2 12.4 12.1 11.2 Fin
Slide 36: Quarterly development of orders received: 2011 – 2013
Quarterly development of orders received: 2011 – 2013 In CHF million 2 500 2 000 1 500 1 000 500 2011 2012 2013 0 Q1 Q2 Q3 Q4 © Schindler | Annual Results Presentation 2013 | Slide 36
Slide 37: Quarterly development of revenue: 2011 – 2013
Quarterly development of revenue: 2011 – 2013 In CHF million 2 500 2 000 1 500 1 000 500 2011 2012 2013 0 Q1 Q2 Q3 Q4 © Schindler | Annual Results Presentation 2013 | Slide 37
Slide 38: Balance sheet
Balance sheet In CHF million 31.12.2013 in % 31.12.2012 in % Cash and cash equivalents 2 228 28.5 2 178 27.9 Other current assets 3 260 41.9 2 992 38.2 Total current assets 5 488 70.4 5 170 66.1 Non-current assets 2 309 29.6 2 652 33.9 Total assets 7 797 100.0 7 822 100.0 Current liabilities 3 974 5
Slide 39: Return on equity (ROE) in %
Return on equity (ROE) in % In % 35 28.7 30 26.6 26.7 25.9 25.2 25 20 15 10 5 0 2009 2010 20111 2012 2013 2 1 After LEAP restructuring costs: 22.3% 2 After Hyundai impairment: 17.3% © Schindler | Annual Results Presentation 2013 - Annex | Page 39
Slide 40: Thank you.
Thank you. Financial calendar 2014 Ordinary General Meeting Schindler Holding Ltd. March 17 Publication of selected key figures as of March 31 April 22 Publication of Interim Report as of June 30 August 13 Publication of selected key figures as of September 30 October 21 Your Investor Relations cont