Schindler elevators are in demand, but the central Swiss company is not capitalizing enough. It gets in its own way. The transformation should be accelerated.
Unlike the logo, Schindler’s production is too complex.
The elevator and escalator manufacturer Schindler feels the same as its products when there is a defect. He’s stuck. In fact, all the prerequisites for advancement are there – just not your own assets.
In the first quarter, Schindler recorded growth in order intake of 3.2 billion francs, an increase of almost 8 percent compared to the same period last year. The construction industry is doing well around the world, elevators are in demand – and have been for a while. At Schindler, however, the result was only weak growth in sales and even a marked decline in operating profit (EBIT) by a quarter to 211 million francs. The margin is one of the weakest in years.
The way is clear
The breakdown service has long since arrived. In January, CEO Thomas Oetterli resigned surprisingly, and the Chairman of the Board of Directors, Silvio Napoli, took over in a dual mandate. Now Napoli speaks of an “extremely difficult situation”. Raising little capital from a growing market is a sign of internal problems.
At Schindler, it’s expensive and inefficient complexity. Instead of complex one-off and custom-made products, the products are to be modular and thus standardized in the future. But the conversion is lengthy and should be accelerated. At least, the desire for less complexity is recognizable: Two positions in the management have been eliminated.
Hurry is required
Schindler is not defenseless. The company from Central Switzerland also suffered from rising material costs and problems in the supply chain, but was able to increase the sales prices “very aggressively”, according to Napoli. New business in the important market of China collapsed due to the corona lockdowns, but growth in the Asia-Pacific region offset this.
But the price war in China is getting fiercer and inflation is picking up speed. Two more reasons to turn your own screws faster in order to remain competitive.
You can refer to Benjamin Triebe, Editor for Business and Business Twitter follow.