Schindler Says Europe Builders Delaying Projects Hurt Sales
Schindler Holding AG (SCHP), the Swiss maker of elevators and escalators, said European builders delaying or postponing projects stunted sales growth in the first quarter.
Revenue rose 4 percent to 1.98 billion Swiss francs ($2.13 billion), the company said today. Analysts predicted 2.01 billion francs. Operating profit rose 1.4 percent to 217 million francs. Shares were little changed at 130.9 francs at the open of trading in Zurich.
“Several new installation and modernization projects were delayed or postponed in various European markets,” Schindler said in a statement, adding that the market “leveled off” in the region. Sales growth mainly came from new installations of lifts in growth markets, Schindler said.
Chief Executive Officer Juergen Tinggren is re-positioning the company to expand in China and India as declining government spending on building projects erodes demand for elevators in Europe. Schindler abandoned a profitability margin target Feb. 19 to spend more on research and new factories in faster growing markets.
Schindler confirmed targets of 6 percent sales growth in local currencies and net income of 740 million francs to 790 million francs this year even as the first quarter came in “slightly below” expectations.
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