• Margin expansion underpinned by improving productivity – JES reported stronger than expected Q1 FY3/26 results, with 30.2% OP growth YoY. Both quarterly GPM and OPM were at record highs at 39.4% and 18.6% respectively, driven by productivity improvements, primarily stemming from higher engineer utilization. Modernization demand remains solid with units up 17.0% YoY, and despite an adverse sales mix, overall profitability continued to trend upward. The key question appears to be whether future margin expansion is attainable – we believe this is possible, through 1) continued improvement in engineer utilization, and 2) increasing geographic density.
