© Schindler 2022

I

Unprecedented mix of challenges expanding

Ukraine war and China lockdowns exacerbate the situation

  • 1. Dealing with foreign exchange burden

    EUR/CHF -4.6% year-to-date

  • 2. Regaining competitive new installation (NI) margins

    FY 2022 material cost inflation: P&L impact from CHF 150m to CHF 200m

  • 3. Resolving supply chain disruptions

    Ukraine war and China lockdowns

  • 4. Streamlining product portfolio complexity

    Excessive options found in modularity platform backlog

  • 5. Adjusting for China NI market contraction

    Tier 2/3/4 housing inventory back to alert levels, units contraction from -5% to -15%

In red: update since February 16, 2022

Update challenge #2: regaining competitive NI margins Steel and aluminum prices back to record levels

HRC: Hot Rolled Coil, source: Bloomberg, indexed, base January 1, 2021

Key actions

  • ▪ Increase dual-sourcing

  • ▪ Negotiations with key suppliers

  • ▪ Lock-in higher volumes

  • ▪ Hedging of bulk metals

Update challenge #2: regain competitive NI margins Price levels still unable to offset cost inflation impact

Price increases need time to materialize (offer-to-bill lead times)

110

100

90

Price level residential elevators country 2

Price level residential elevators country 1

Price level residential elevators country 3

Key actions

  • ▪ First series of price increases across all product lines and regions

  • ▪ Inflation clause enforcement: open tenders + backlog

  • ▪ Pricing-quality based incentive scheme for sales force

Update challenge #3 and #4: Supply chain/product complexity Supply chain issues exacerbated by excessive options in modularity platform backlog

Factories stretched by legacy backlog vs. growing modular product deliveriesUpdate since February 16, 2022:

Backlog analysis revealed excessive number of options offered on new modular platform creating:

  • ▪ ripple-down effects across the whole value chain

  • ▪ delivery delays to site

Key issue

Status sales release of modular products (OIT)

Key actions

  • ▪ Executive task force deployed

  • ▪ Outstanding backlog and tenders: customer renegotiation for optimized design and delivery time

  • ▪ Drastic reduction of options offered

  • ▪ Sales configurator adjusted

OIT: Order intake

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Schindler Holding Ltd. published this content on 22 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 April 2022 04:37:03 UTC.