Schindler lifts 2023 outlook on strong services business

Oct 19 (Reuters) – Swiss elevator maker Schindler (SCHP.S) on Thursday slightly raised its 2023 sales and earnings guidance after posting a 23.2% quarterly increase in net profit, driven by continued growth in its services business.

Full-year net profit is expected to reach 880 million to 910 million Swiss francs ($979 million-$1.01 billion) and revenue to grow 6% to 8% in local currencies, Schindler said. The company previously aimed for revenue growth of 5% to 8% and net profit of 860 million to 900 million francs.

Net profit in the July-September period came in at 228 million Swiss francs, beating analyst estimates of 214 million, according to a company-provided poll.

Schindler is well-placed among competitors as its China exposure is lower than that of peers and most of its earnings come from the services business, which maintains elevators, escalators and moving walks, rather than new installations.

China has struggled this year with a deepening crisis in the property sector, which makes up a quarter of the world’s second-largest economy. Its real estate sector is the biggest credit event risk, according to Bank of America’s September fund manager survey.

The Chinese market makes up around 15% of Schindler’s sales, while Finnish rival Kone (KNEBV.HE) generates about a third of its sales in the country.

Schindler said the global housing deficit would drive residential demand and fuel future new installations, offsetting China’s current housing oversupply.

“We see an in-line Q3, slight raise in the guide and an unchanged expectation for China as enough for the stock this morning,” J.P.Morgan analyst Andrew Wilson said in a note.

Schindler’s shares were seen up 1.4% in Julius Baer pre-market trade at 0630 GMT.

($1 = 0.8988 Swiss francs)

Our Standards: The Thomson Reuters Trust Principles.