Published by Global Banking and Finance Review
Posted on February 12, 2025
By Bartosz Dabrowski and Bernadette Hogg
(Reuters) -Swiss lift maker Schindler is confident it can secure increased orders in North America and said it would not be immediately affected by steel tariffs as it sources most of the raw materials for its U.S. plants within the country.
"We are a fully U.S.-based company in the U.S.," CEO Paolo Compagna told Reuters on Wednesday, saying the majority of what Schindler does in its lift and escalator manufacturing plants in North Carolina and Pennsylvania is sourced and produced in the United States.
"Having been all the time U.S.-based now might be a little advantage," he added.
Schindler expects revenue from its North American modernisation business to grow by 5% to 10% in 2025.
On group level, it sees revenue growth in a low single-digit percentage and improved margins this year, as the services market grows even as new construction activity remains subdued.
Schindler's margins began to show a recovery in 2024, driven by improved pricing and restructuring measures, including a digitalisation programme.
The company said it expected its earnings before interest and tax (EBIT) margin to be around 12% this year.
The adjusted EBIT margin rose to 12.5% in the fourth quarter of 2024 from 11.4% in the same period a year earlier.
Schindler said that while new installations fell globally, and notably in China, the country's service market expanded and made up more than 10% of the company's modernisation revenues last year.
Schindler is less exposed to China's property crisis than its competitors like Finland's Kone, with around 13% revenue exposure to the country.
Its fourth quarter sales fell 3.5% to 2.86 billion Swiss francs ($3.13 billion), missing analysts' average forecast of 2.95 billion francs in a poll compiled by Vara Research.
($1 = 0.9131 Swiss francs)
(Reporting by Bartosz Dabrowski and Bernadette Hogg in Gdansk; Editing by Milla Nissi)
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