Kone Oyj Class B · OMXHEX:KNEBV
Kone Oyj Class B — Q1 2021 Earnings Presentation
28 slides from Kone Oyj Class B's earnings presentation, Apr 28, 2021
Slide 1: KONE Q1 2021
KONE Q1 2021 APRIL 28, 2021 HENRIK EHRNROOTH, PRESIDENT & CEO ILKKA HARA, CFO
Slide 2: Q1 2021 Highlights
Q1 2021 Highlights • Growth in sales and earnings • Exceptionally strong cash flow • Signs of recovery in market activity
Slide 3: Q1 2021 Key figures
Q1 2021 Key figures STRONG START TO THE YEAR Comparable Q1/2021 Q1/2020 Change change Orders received MEUR 2,075.9 2,109.3 -1.6 % 1.3 % Order book MEUR 8,180.4 8,386.4 -2.5 % -1.9 % Sales MEUR 2,326.4 2,198.3 5.8 % 9.1 % Operating income (EBIT) MEUR 249.8 197.2 26.7 % Operating income margin (EBIT %
Slide 4: Q1 2021 Business highlights
Q1 2021 Business highlights ▪ New strategy phase focused on differentiation through adaptability and sustainability – Capturing growth opportunities from value added solutions ▪ DX class elevators rolled out in Asia-Pacific and EMEA ▪ 24/7 Connected Services sales accelerating – Increased actions ar
Slide 5: Sustainability highlights from 2020
Sustainability highlights from 2020 -8.9% Reduction in KONE’s overall operational carbon CDP 2020 ’A’ score for corporate footprint relative to sales climate leadership Science-based targets for significant Forbes’ 2020 Global reductions in greenhouse gas 2000: World’s Best emissions by 2030 Employe
Slide 6: KONE's market position strengthened in 2020
KONE’s market position strengthened in 2020 New equipment market in 2020 Equipment base in 2020 ~1 million units >18 million units 6% 7% 3% 3% 2% 7% China China S-E Asia, S-E Asia, India and Australia 17% 41% India and Australia EMEA EMEA North America North America South America 6% 66% South Americ
Slide 7: Market development
Market development
Slide 8: Elevator usage increasing, but still clearly below normal levels
Elevator usage increasing, but still clearly below normal levels Monthly average number of starts per elevator, data from connected units Indexed, indicative as data from a limited number of units 1,2 1,1 Mar 21 vs Dec 20 1,0 Singapore +5% 0,9 0,8 US +21% 0,7 Germany +8% 0,6 Italy +6% 0,5 UK -7% 0,4
Slide 9: New equipment market development in Q1 2021
New equipment market development in Q1 2021 DEMAND DECREASED IN MOST PARTS OF THE WORLD FROM A HIGH COMPARISON PERIOD North American market EMEA market Asia-Pacific market --- - ++ <5% of ~20% of >2/3 of global global global market market market (in units) (in units) (in units) ▪ Market declined sig
Slide 10: Service market development in Q1 2021
Service market development in Q1 2021 GLOBAL MAINTENANCE MARKET WAS RESILIENT, MODERNIZATION STILL IMPACTED BY DELAYED DECISION-MAKING North American market EMEA market Asia-Pacific market Maintenance Modernization Maintenance Modernization Maintenance Modernization Stable Stable Stable -- ++ + <10%
Slide 11: Chinese property market in Q1 2021
Chinese property market in Q1 2021 ▪ In units ordered, the new equipment market grew significantly y-o-y ▪ Pricing environment continues to be characterized by intense competition ▪ First quarter economic development robust ▪ Healthy activity in the real estate markets ▪ Financing environment for de
Slide 12: Q1 Financials
Q1 Financials
Slide 13: Mixed development between the regions
Mixed development between the regions GROWTH IN CHINA, RESTRICTIONS AND UNCERTAINTY STILL IMPACTED OTHER MARKETS KONE’s Q1 orders received growth at comparable FX rates KONE’s Q1 sales growth at comparable FX rates New equipment Modernization Maintenance New equipment Modernization Maintenance (repa
Slide 14: Orders received
Orders received ORDERS RECEIVED ON A STABLE LEVEL THANKS TO CONTINUED MOMENTUM IN CHINA ▪ In Q1, the margin of MEUR orders received declined slightly 10,000 9,000 8,400 7,959 8,185 8,000 7,621 7,554 7,797 6,813 1.3% 7,000 6,151 2,109 6,000 27 5,496 60 2,076 5,000 4,465 4,000 Q1 growth 3,000 -1.6% 2,
Slide 15: Sales
Sales SALES GROWTH WAS DRIVEN BY STRONG RECOVERY IN CHINA Growth at comp. FX MEUR 9.1% 11,000 9,982 9,939 17.9% -4.2% 10,000 9,071 3.2% 9,000 8,647 8,784 8,797 26 14 65 2,326 8,000 7,334 6,933 7,000 6,277 181 6,000 5,225 5,000 2,198 Q1 growth 4,000 5.8% 3,000 EMEA 1.0% APAC 26.8% 2,000 Americas -2.6
Slide 16: Profitability
Adjusted EBIT EARNINGS GROWTH DRIVEN BY INCREASED VOLUMES AND COST EFFICIENCY Adjusted EBIT* and adjusted EBIT margin Q1 adj. MEUR; % EBIT margin 10,7% 1,600 9.4% 1,400 1,293 1,241 1,237 1,251 -4 1,206 250 1,200 1,112 1,036 1,000 953 829 206 800 725 Q1 growth + Previously improved 600 21.5% pricing
Slide 17: Cash flow
Cash flow Q1 CASH FLOW EXCEPTIONALLY STRONG Cash flow from operations* ▪ Operating income and MEUR net working capital contributed positively 2,000 1,908 to the cash flow 1,509 1,550 1,500 1,474 1,346 1,213 1,263 1,150 1,071 1,000 820 500 347 425 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 18: Market and business outlook
Market and business outlook
Slide 19: Market outlook for 2021 (updated)
Market outlook for 2021 (updated) New equipment markets ▪ The Chinese market is expected to grow slightly ▪ In the rest of the world, the markets are expected to gradually recover Maintenance markets ▪ The maintenance markets are expected to be resilient, excluding the direct impacts of the lockdown
Slide 20: Business outlook for 2021 (specified)
Business outlook for 2021 (specified) Sales Supporting our performance Burdening our result ▪ KONE estimates that in 2021, its sales growth will be in the range of 2% to 6% (0% to 6%) at Solid order book and Increased material and maintenance base logistics costs comparable exchange rates as compare
Slide 21: Summary
Summary ▪ Continued strong performance ▪ Focused on offsetting cost inflation with productivity and differentiated offering ▪ Well positioned to benefit from market recovery
Slide 22: Dedicated to People Flow
Dedicated to People Flow" KOIN|E
Slide 23: Appendix
Appendix
Slide 24: 1-3/2021 Sales split
1-3/2021 Sales split By business By region 13% 20% (15%) (23%) 40% (34%) 51% 35% (48%) (37%) 40% (43%) New equipment Asia-Pacific Maintenance EMEA (Europe, Middle East and Africa) Modernization Americas 1-3/2020 figures in brackets. Figures in charts are rounded and at historical exchange rates. 24
Slide 25: KONE in China
KONE in China New equipment market China’s share of KONE’s orders received and sales New equipment orders received in units vs. market development Monetary value 50 KONE The market grew significantly in Market <25% 40 units from a low comparison. ~35% ~30% >35% ~40% KONE’s new equipment orders 30 gr
Slide 26: Currencies
Currencies Sales by currencies 1-3/2021 Currency impact* Main currencies USD Q1/2021 2020 Mar 31, average average 2021 spot Other MEUR Q1/2021 1–12/2020 EUR / 7.8367 7.8916 7.6812 CNY Sales -65.2 -87.0 EUR / 1.2063 1.1452 1.1725 USD EBIT -4.4 -5.3 EUR / 0.8764 0.8864 0.8521 GBP CNY Orders -59.9 -62.
Slide 27: Balance sheet – assets employed
Balance sheet – assets employed MEUR Mar 31, 2021 Mar 31, 2020 Dec 31, 2020 Assets employed Goodwill 1,352.9 1,370.7 1,327.0 Other intangible assets 223.4 229.4 223.2 Tangible assets 724.9 730.2 710.0 Investments 139.5 137.0 143.2 Net working capital -1,467.7 -964.3 -1,160.1 Assets employed total 97
Slide 28: Net working capital
Net working capital MEUR Mar 31, 2021 Mar 31, 2020 Dec 31, 2020 Net working capital Inventories 620.9 666.0 597.0 Advance payments received and deferred revenue -1,864.9 -1,774.3 -1,766.8 Accounts receivable 2,164.0 2,192.8 2,178.6 Deferred assets and income tax receivables 746.2 741.1 720.9 Accrual