Schindler H1 2025 presentation: Margin expansion continues despite FX headwinds

Schindler Holding AG reported robust H1 2025 results, with net profit up 7.5% to CHF 531 million and EBIT increasing 9.2% to CHF 675 million, driven by significant margin expansion despite substantial foreign exchange headwinds. While reported revenue declined 1.9% in Swiss francs, local currency revenue grew 1.4%, and order intake accelerated 5.3% in local currency, primarily from the strong modernization segment which offset weakness in new installations, particularly in China. The company maintained its full-year 2025 guidance for low single-digit local currency revenue growth and an approximate 12% EBIT margin, reflecting confidence in its operational efficiencies and focus on higher-margin service and modernization businesses.

Analysis

Schindler Holding AG's H1 2025 results demonstrate strong underlying operational performance, which was significantly obscured by adverse foreign exchange movements. While reported revenue in Swiss francs declined 1.9% to CHF 5,487 million, growth in local currency terms was a positive 1.4%, driven by an even more robust 5.3% local currency increase in order intake. The core strength lies in the company's successful strategic focus on higher-margin businesses, evidenced by exceptional order growth in the modernization segment across all regions. This pivot effectively counteracted the persistent weakness in the new installations market, particularly in China. Profitability metrics were a key highlight, with reported EBIT growing 9.2% to CHF 675 million, expanding the EBIT margin by 130 basis points. This margin improvement, driven by operational efficiencies and favorable pricing, underscores management's execution capabilities. The company maintained its full-year 2025 guidance for low single-digit revenue growth in local currency and an EBIT margin of approximately 12%, signaling confidence in navigating ongoing headwinds such as the China downturn and wage inflation, supported by a strong net liquidity position of CHF 3,274 million.

Key Decisions for Investors

• Investors should look past the headline revenue decline in Swiss francs and focus on the strong local currency growth and significant EBIT margin expansion, which indicate robust underlying business fundamentals and successful strategic execution.
• The divergence between the strong modernization segment and the weak new installations segment, especially in China, is a key risk factor to monitor; the success of the company's organizational realignment in China will be critical to mitigating this pressure.
• With guidance reaffirmed and a strong balance sheet, the upcoming Capital Markets Day in June 2026 is a key catalyst to watch for insights into long-term strategy and potential capital deployment, such as acquisitions or shareholder returns.