Schindler Hldg Ag Akt

Thank you, Sandra. Good morning, ladies and gentlemen, and welcome to our first half 2024 results conference call. Again, my name is Lars Borson. I'm the head of investor relations at Schindler. I'm here together with Silvio Napoli, our chairman and CEO, Paolo Campagna, our COO, and Carla De Geisler, our CFO. Silvio will provide a brief overview of the key messages this quarter. Paolo will discuss our market outlook and our order intake in the quarter in the first half. and Carla will take us through the financials. After the presentation, we have your questions. We plan to close the call at 11 o'clock. And with that, I hand over to Silvio. Silvio, please go ahead.

Thank you, Lars. Good morning, everyone. At the start of the year, we set ourselves a clear ambition, and I'm pleased to report that in the half year, we are delivering on these commitments. We are delivering these commitments in spite of, let's say, a contrasting market situation where we see this reinforcing contrast between a robust service and actually fast-growing mod market against the mixed situation in the high markets. China continues to be weak. Asia Pacific largely as a result of the China continued downturn is soft, we see EMEA and Americas stable overall, but then again in those regions we see strong markets in key countries like India, a region like the Middle East or Brazil coming back very strongly this year. Now, In these circumstances, when I mention delivering on commitments, you will have seen that we were able to deliver profitability gains at all levels, starting with our EBIT adjusting margin, where we delivered an 80 basis point improvement, but also a net profit level where our improvement has been of 7%. so this makes for six consecutive quarters of year-on-year improvement those improvements were largely driven by delivering on efficiency gains and to be clear this is far from over there is a lot more to come especially in terms of overhead and a cfo will address that in a second some of you have referred to our plan as being based on a self-help agenda and again i'm pleased to say that we are progressing on this self-help agenda and progressing on this health agenda means not only delivering on efficiency operationally but also on making sure we bring to the market new products who which in turn help the top line but also catalyze new processes which in turn drive efficiency And so I'm very pleased to report that our modular platform rollout is gaining traction with 70 percent of units sold year to date in these markets. Based on this new product, what it was launched and that in turn enables new processes. In parallel, I'm also pleased to actually excited to report that in the US, we successfully introduced our new mid-rise product, which strengthens our competitive position in one of the highest value markets in the world. Moving on to, in fact, what is a core business, you hear me saying very often that we are a service company. And so the sustainable value creation in our business comes from portfolio growth. And there, I'm pleased to say that our portfolio is growing at 5%, in fact, even a bit more. And the key is the quality of this portfolio, which then today is connected to the cloud, which then allows data transfer over the air, which in turn generates digital services. And there I'm pleased to say that not only every new unit that we sell is connected, but so far we even managed to connect more of those of the existing portfolio, which now brings us to more than a third of our portfolio with exciting potential in terms of upcoming digital revenue, higher conversion rates, higher retention rates, and many more aspects that we discussed in the past. We're happy to discuss later today. Amidst all that, of course, we shouldn't forget growth. And I'm pleased to say that we also continue to grow in spite of the challenging market conditions. And in particular, I am excited to see our growth in modernization accelerating quarter on quarter, which, of course, combined with our sustained, robust growth in service, allows to continue growing in spite of the decline in NI, a larger result as a result of the market. And talking of market conditions, I'd like now to hand over to Paolo Compagna, a Chief Operating Officer, who provides a more general view of markets and our performance therein. Paolo?

Thank you, Silvio. Good morning, everyone, from my side. Overall, we maintain our global 24 year market outlook by business and the region, and we continue being very vigilant in monitoring the markets quite closely. We have made a few updates based on our best assessment, but surely considering the newest available markets numbers. Therefore. You see in Americas, we are slightly upgrading our outlook for the region to more stable due to the pickup of activities in Brazil. While in the US we see the market was down high single digit in the first half of the year, which has been clearly confirmed by the latest NEI report, which confirms minus 10% in the second quarter. and following a decline of 8.4% for the first half of this year. So therefore, we do not foresee any growth for the US market, specifically for the full year. We've also decided for a similar slight upgrade to our outlook for the EMEA region due to the strong growth in Turkey and the quite good momentum in several of the EMEA countries. In contrast, we are currently anticipating only a moderate growth in Asia outside of China with continued robust growth in India, but as low as expected growth in Southeast Asia. In China, the market weakness and our outlook downgrade from three months ago, you might remember, are now well confirmed. Well, in spite of the measures announced by the government in May, which aimed of stabilizing the real estate sector. We think about this multibillion package, which now has been geared towards increased absorption of the vacant housing stock rather than supporting new construction, which therefore led to a very limited impact to our elevator market. And the latest statistics show no major change in real estate investment and other lead indicators, while home prices continue to fall. The outlook for modernization market, which from now on we will be reporting monetary value rather than units, remains bright with overall robust demand due to aging installed base in the Western market as well as in China. The global installed base keeps growing at a healthy pace, fueled by the sizable volume sold in the prior years, in particular in Asia, now, well, being converted into portfolio. And here I like to re-emphasize that we are predominantly a service company with for more than 60% revenue generated in the growing maintenance, repair and modernization markets. And well, in terms of exposure to China, which was below 14 percent in 23, it has been even lower in the first half of this year. Turning now to the next page, slide six, and looking at our own order intake for the first half of the year by region and by business. And here we are making our reporting consistent with our market outlook. with new installation and service reported in units, while modernization is in order by value. Our global new installation order volume decreased slightly overall, due to the deteriorating market conditions in China. Elsewhere, we are pleased with our performance, especially in South America, while in EMEA, our order intake increased in the quarter, driven by Southern Europe, which for us includes the MENA region. Our modernization order in value accelerated globally in Q2 and grew by more than 5% for the first half of the year as a result, driven particularly by China and Americas. In the latter region, we were successful in winning several large modernization projects. In contrast, the timing of the large project awards or bookings was not so much favorable in Asia Pacific, now excluding China, resulting in a decline in value. Our service portfolio units continue to expand at a healthy pace, driven by the strong energy conversions, in particular in China and Asia-Pacific. With that overview, I would like to hand over to Carla to lead us through the numbers.