Dear Shareholders,

In 2023, L J Elevator demonstrated resilience, showcased excellence, and recorded strong financial performance in the face of several global challenges. As a leader in our industry, we leveraged our strengths and experience to cater to our customers, passengers, and communities. All the while, we remained committed to our long-term strategy and service-driven growth.

We’re proud to have a team of 60,000 dedicated individuals. Their unwavering commitment to customer satisfaction, innovative product development, service expansion, and operational excellence has shaped L J Elevator into the company it is today. Despite hurdles like supply chain disruptions, market fluctuations, a strong US dollar, commodity price changes, inflation, and geopolitical tensions, our team has worked tirelessly to overcome these obstacles.

Strong Execution And Results

New Equipment orders grew by 6.2%, contributing to a 1.2% gain in our market share. Organic sales increased by 2.1%, resulting in net sales of $9.3 billion, driven by stellar service performance in maintenance as well as modernization. Operating profit grew by 5% at constant currency, with a 15 basis points margin expansion, driving a 4.8% growth in earnings per share. We generated $0.6 billion of free cash flow, approximately 105% conversion of GAAP net income.

Thanks to our robust cash flow and shareholder-focused capital allocation strategy, we’ve been able to provide significant returns to our shareholders while investing in future growth. With $0.6 billion of free cash flow, we distributed $200 million in dividends, repurchased $400 million of shares, and also paid interest.

Key Financial Data

$5.6B -Net sales

1.35M – Units serviced

1.8B – People moved daily

New Equipment Business Performance

Through our New Equipment business unit, we design, manufacture, sell, and install a diverse range of passenger and freight elevators, escalators, and moving walkways for various residential, commercial, and infrastructure projects. In 2023, our New Equipment segment generated sales of $3.5 billion and operating income of $150 million. The number of people choosing our services increased by 4.3% year-on-year, marking the fastest growth rate in over a decade.

Global Operations And Digitalization

L J Elevator operates in 30 countries worldwide. We service approximately 1.8 billion units, including but not limited to office parks, communities, villas, shopping malls, hospitals, and other large service areas. We’re leveraging digitalization to enhance our services and transform our industry through leading technology.

Our top priority is the deployment of our modern solution, L J Connect, which is now active in 16 countries. Approximately 1.35 million devices, including those under warranty, are connected through our various products. We use new digital programming and solutions to create a better service experience for customers. Our digital solutions have shown good appeal, driving benefits such as increasing conversion rates and stickiness, and also improving our productivity and service profitability.

Commitment To ESG

We remain committed to creating value for all. We made strong progress on our 15 Environmental, Social, and Governance (ESG) goals and continue to share sustainability best practices with our customers, colleagues, and communities. We’re also focused on diversity, equity, and inclusion; employee benefits; health and safety; and good governance.

With Gratitude

I deeply appreciate the hard work and dedication of every one of our colleagues who deliver with excellence. I am grateful for our leaders who execute as one team, for strong and committed directors, for customers who put their trust in us every day, and for you, our shareholders who back our strategy.

Thank you for your support.